AGREEMENT AND PLAN OF MERGER dated as of April 2, 2007 by and among DUBAI AEROSPACE ENTERPRISE (DAE) LTD, LMA MERGER SUB, INC., SAH MERGER SUB, INC., PIEDMONT/HAWTHORNE HOLDINGS, INC., STANDARD AERO ACQUISITION HOLDINGS, INC., and TC GROUP, L.L.C.
CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS. THE
CONFIDENTIAL REDACTED PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH
REDACTIONS.
Exhibit 2.1
Execution Version
dated as of
April 2, 2007
by and among
DUBAI AEROSPACE ENTERPRISE (DAE) LTD,
LMA MERGER SUB, INC.,
SAH MERGER SUB, INC.,
PIEDMONT/HAWTHORNE HOLDINGS, INC.,
STANDARD AERO ACQUISITION HOLDINGS, INC.,
and
TC GROUP, L.L.C.
TABLE OF CONTENTS
Page | ||||||
ARTICLE I. CERTAIN DEFINITIONS | 3 | |||||
ARTICLE II. THE MERGERS | 16 | |||||
2.1
|
Conversion of Landmark Company Shares and Landmark Vested Options | 16 | ||||
2.2
|
Conversion of Standard Company Shares and Standard Vested Options | 17 | ||||
2.3
|
Payment and Exchange of Certificates | 19 | ||||
2.4
|
Effective Times of Mergers; Closing Date | 21 | ||||
2.5
|
Holder Allocable Expenses | 21 | ||||
2.6
|
Termination of Exchange Fund | 22 | ||||
2.7
|
Lost, Stolen or Destroyed Certificates | 22 | ||||
2.8
|
Dissenting Common Shares | 23 | ||||
2.9
|
Withholding Rights | 23 | ||||
2.10
|
Calculation of Landmark Merger Consideration and Standard Merger Consideration | 23 | ||||
2.11
|
*** | 24 | ||||
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANIES | 29 | |||||
3.1
|
Corporate Organization of the Companies | 29 | ||||
3.2
|
Subsidiaries | 30 | ||||
3.3
|
Due Authorization | 30 | ||||
3.4
|
No Conflict | 31 | ||||
3.5
|
Governmental Authorities; Consents | 32 | ||||
3.6
|
Capitalization of the Companies | 32 | ||||
3.7
|
Capitalization of Subsidiaries of the Companies | 33 | ||||
3.8
|
Financial Statements | 33 | ||||
3.9
|
Undisclosed Liabilities | 35 | ||||
3.10
|
Absence of Certain Changes | 35 | ||||
3.11
|
Litigation and Proceedings | 38 | ||||
3.12
|
Legal Compliance | 38 | ||||
3.13
|
Contracts; No Defaults | 38 | ||||
3.14
|
Employee Benefit Plans | 40 | ||||
3.15
|
Labor Relations | 43 | ||||
3.16
|
Taxes | 44 | ||||
3.17
|
Brokers’ Fees | 46 | ||||
3.18
|
Insurance | 46 | ||||
3.19
|
Licenses, Permits and Authorizations | 46 | ||||
3.20
|
Machinery, Equipment and Other Tangible Property | 46 | ||||
3.21
|
Real Property | 47 | ||||
3.22
|
Intellectual Property | 47 | ||||
3.23
|
Environmental Matters | 47 | ||||
3.24
|
Customers and Suppliers | 49 | ||||
3.25
|
Affiliate Transactions | 49 | ||||
3.26
|
Business Relationships | 49 |
ii
Page | ||||||
3.27
|
Government Contracts | 50 | ||||
3.28
|
Absence of Certain Business Practices | 52 | ||||
3.29
|
Product Liability and Warranty Claims | 52 | ||||
3.30
|
State Takeover Statutes | 53 | ||||
3.31
|
No Limitation on Other Representations | 53 | ||||
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF ACQUIROR | 53 | |||||
4.1
|
Corporate Organization | 53 | ||||
4.2
|
Due Authorization | 54 | ||||
4.3
|
No Conflict | 54 | ||||
4.4
|
Litigation and Proceedings | 54 | ||||
4.5
|
Governmental Authorities; Consents | 55 | ||||
4.6
|
Financial Ability | 55 | ||||
4.7
|
Brokers’ Fees | 55 | ||||
4.8
|
Operations of Merger Subs | 55 | ||||
4.9
|
No Outside Reliance | 56 | ||||
4.10
|
Acquisition of Interests for Investment | 56 | ||||
4.11
|
Business Relationships | 56 | ||||
4.12
|
Separate and Independent Effect | 56 | ||||
ARTICLE V. COVENANTS OF THE COMPANIES | 56 | |||||
5.1
|
Conduct of Business | 56 | ||||
5.2
|
Inspection | 58 | ||||
5.3
|
HSR Act and Foreign Antitrust Approvals | 59 | ||||
5.4
|
No Solicitations | 59 | ||||
5.5
|
Cooperation with Financing | 60 | ||||
5.6
|
Affiliate Transactions | 61 | ||||
5.7
|
Information Statement | 61 | ||||
5.8
|
Interested Parties | 62 | ||||
ARTICLE VI. COVENANTS OF ACQUIROR | 62 | |||||
6.1
|
HSR Act and Foreign Antitrust Approvals | 62 | ||||
6.2
|
Indemnification | 63 | ||||
6.3
|
Continued Employment | 64 | ||||
6.4
|
Financing | 65 | ||||
6.5
|
DoT Matters | 65 | ||||
6.6
|
Solvency Opinion | 65 | ||||
6.7
|
SR Technics Group | 66 | ||||
ARTICLE VII. JOINT COVENANTS | 66 | |||||
7.1
|
Confidentiality | 66 | ||||
7.2
|
Support of Transaction | 67 | ||||
7.3
|
CFIUS Approval | 67 | ||||
7.4
|
Sale of FBO Business | 68 | ||||
7.5
|
Letter of Credit | 69 |
iii
Page | ||||||
ARTICLE VIII. CLOSING | 70 | |||||
8.1
|
Filing of Certificate of Merger | 70 | ||||
8.2
|
Closing | 71 | ||||
ARTICLE IX. CONDITIONS TO OBLIGATIONS | 71 | |||||
9.1
|
Conditions to Obligations of Acquiror, Merger Subs and the Companies | 71 | ||||
9.2
|
Conditions to Obligations of Acquiror and Merger Subs | 71 | ||||
9.3
|
Conditions to the Obligations of the Companies | 72 | ||||
ARTICLE X. TERMINATION/EFFECTIVENESS | 73 | |||||
10.1
|
Termination | 73 | ||||
10.2
|
Effect of Termination | 74 | ||||
ARTICLE XI. HOLDER REPRESENTATIVE | 74 | |||||
11.1
|
Designation and Replacement of Holder Representative | 74 | ||||
11.2
|
Authority and Rights of the Holder Representative; Limitations on Liability | 75 | ||||
ARTICLE XII. MISCELLANEOUS | 76 | |||||
12.1
|
Nonsurvival of Representations and Warranties | 76 | ||||
12.2
|
Waiver | 76 | ||||
12.3
|
Notices | 76 | ||||
12.4
|
Assignment | 78 | ||||
12.5
|
Rights of Third Parties | 78 | ||||
12.6
|
Expenses | 78 | ||||
12.7
|
Governing Law | 78 | ||||
12.8
|
Captions; Counterparts | 79 | ||||
12.9
|
Schedules and Annexes | 79 | ||||
12.10
|
Construction | 79 | ||||
12.11
|
Entire Agreement | 80 | ||||
12.12
|
Amendments | 80 | ||||
12.13
|
Publicity | 80 | ||||
12.14
|
Severability | 80 | ||||
12.15
|
Jurisdiction | 81 | ||||
12.16
|
Enforcement | 81 |
iv
Schedules
Schedule 1.1 — Permitted Liens
Schedule 1.2 — Knowledge (Landmark)
Schedule 1.3 — Knowledge (Standard Aero)
Schedule 1.4 — Knowledge (Acquiror)
Schedule 2.11(c)(ii) — EBITDA of FBO Business
Schedule 3.2 — Subsidiaries
Schedule 3.4 — Exceptions to No Conflict Representation
Schedule 3.5 — Governmental Consents
Schedule 3.6 — Capitalization of the Companies
Schedule 3.7 — Capitalization of Subsidiaries of the Companies
Schedule 3.8 — Financial Statements
Schedule 3.9 — Undisclosed Liabilities
Schedule 3.10 — Absence of Certain Changes
Schedule 3.11 — Litigation and Proceedings
Schedule 3.12 — Legal Compliance
Schedule 3.13 — Contracts
Schedule 3.14 — Employee Benefit Plans
Schedule 3.15 — Labor Relations
Schedule 3.16 — Taxes
Schedule 3.17 — Brokers’ Fees
Schedule 3.18 — Insurance
Schedule 3.19 — Licenses, Permits, and Authorizations
Schedule 3.20 — Machinery, Equipment, and Other Tangible Property
v
Schedule 3.21 — Real Property
Schedule 3.22 — Intellectual Property
Schedule 3.23 — Environmental Matters
Schedule 3.24 — Customers and Suppliers
Schedule 3.25 — Affiliate Transactions
Schedule 3.27 — Government Contracts
Schedule 4.3 — No Conflict Representation
Schedule 4.4 — Litigation and Proceedings
Schedule 4.5 — Governmental Authorities; Consents
Schedule 4.7 — Brokers’ Fees
Schedule 5.1 — Conduct of Business
vi
Annexes
Annex A — Landmark Certificate of Merger
Annex B — Standard Certificate of Merger
Annex C — Form of Letter of Transmittal
Annex D — Form of Option Acknowledgement
***
vii
Execution Version
This Agreement and Plan of Merger (this “Agreement”), dated as of April 2, 2007, is
entered into by and among DUBAI AEROSPACE ENTERPRISE (DAE) LTD, a Dubai International Financial
Center Registered Company (“Acquiror”), LMA MERGER SUB, INC., a Delaware corporation and a
wholly-owned subsidiary of Acquiror (“Landmark Merger Sub”), SAH MERGER SUB, INC., a
Delaware corporation and a wholly-owned subsidiary of Acquiror (“Standard Merger Sub” and
together with Landmark Merger Sub, “Merger Subs”), PIEDMONT/HAWTHORNE HOLDINGS, INC., a
Delaware corporation (“Landmark”), STANDARD AERO ACQUISITION HOLDINGS, INC., a Delaware
corporation (“Standard Aero”); each of Landmark and Standard Aero individually referred to
herein as a “Company” and together as the “Companies”), and TC GROUP, L.L.C., a
Delaware limited liability company (“TC Group”), solely in its capacity as the initial
Holder Representative hereunder.
PLAN OF MERGER
A. On the terms and subject to the conditions set forth in this Agreement, Acquiror, Landmark
Merger Sub and Landmark (Landmark Merger Sub and Landmark sometimes being referred to herein as the
“Landmark Constituent Corporations”) are hereby adopting a plan of merger, providing for
the merger of Landmark Merger Sub with and into Landmark, with Landmark being the surviving
corporation. This merger (the “Landmark Merger”) shall, on the terms and subject to the
conditions set forth in this Agreement, be consummated in accordance with this Agreement and
evidenced by a Certificate of Merger in substantially the form of Annex A hereto (the
“Landmark Certificate of Merger”), such Landmark Merger to be consummated as of the
Effective Time of the Landmark Merger (as defined below).
B. On the terms and subject to the conditions set forth in this Agreement, Acquiror, Standard
Merger Sub and Standard Aero (Standard Merger Sub and Standard Aero sometimes being referred to
herein as the “Standard Constituent Corporations”) are hereby adopting a plan of merger,
providing for the merger of Standard Merger Sub with and into Standard Aero, with Standard Aero
being the surviving corporation. This merger (the “Standard Merger”; the Landmark Merger
and the Standard Merger are collectively referred to herein as the “Mergers”) shall, on the
terms and subject to the conditions set forth in this Agreement, be consummated in accordance with
this Agreement and evidenced by a Certificate of Merger in substantially the form of Annex
B hereto (the “Standard Certificate of Merger”), such Standard Merger to be consummated
as of the Effective Time of the Standard Merger (as defined below).
C. Upon consummation of the Mergers, the separate corporate existence of each of Landmark
Merger Sub and Standard Merger Sub shall cease, and each of Landmark (as the surviving corporation
in the Landmark Merger and hereinafter referred to for the periods on and after the Effective Time
of the Landmark Merger as the “Landmark Surviving Corporation”) and Standard Aero (as the
surviving corporation in the Standard Merger and hereinafter referred to for the periods on and
after the Effective Time of the Standard Merger as the “Standard Surviving Corporation” and
together with the Landmark Surviving Corporation, the “Surviving
Corporations”), shall continue its corporate existence under the Delaware General
Corporation Law (the “DGCL”) as a wholly-owned subsidiary of Acquiror.
D. On and after the Effective Time of the Landmark Merger, the Landmark Surviving Corporation
shall possess all the rights, privileges, powers and franchises and be subject to all of the
restrictions, obligations and duties of Landmark and Landmark Merger Sub, all as provided under
Section 259 of the DGCL.
E. On and after the Effective Time of the Standard Merger, the Standard Surviving Corporation
shall possess all the rights, privileges, powers and franchises and be subject to all of the
restrictions, obligations and duties of Standard Aero and Standard Aero Merger Sub, all as provided
under Section 259 of the DGCL.
F. At the Effective Time of the Landmark Merger, (i) the Certificate of Incorporation and
Bylaws of the Landmark Surviving Corporation shall be the Certificate of Incorporation and Bylaws
of Landmark Merger Sub as in effect immediately prior to the Effective Time of the Landmark Merger,
until thereafter amended as provided therein and under the DGCL, (ii) the directors of the Landmark
Surviving Corporation shall be the directors of Landmark Merger Sub immediately prior to the
Effective Time of the Landmark Merger until their successors have been duly elected or appointed
and qualified and (iii) the officers of the Landmark Surviving Corporation shall be the officers of
Landmark immediately prior to the Effective Time of the Landmark Merger, until their successors
have been duly elected or appointed and qualified.
G. At the Effective Time of the Standard Merger, (i) the Certificate of Incorporation and
Bylaws of the Standard Surviving Corporation shall be the Certificate of Incorporation and Bylaws
of Standard Merger Sub as in effect immediately prior to the Effective Time of the Standard Merger,
until thereafter amended as provided therein and under the DGCL, (ii) the directors of the Standard
Surviving Corporation shall be the directors of Standard Merger Sub immediately prior to the
Effective Time of the Standard Merger until their successors have been duly elected or appointed
and qualified and (iii) the officers of the Standard Surviving Corporation shall be the officers of
Standard Aero immediately prior to the Effective Time of the Standard Merger, until their
successors have been duly elected or appointed and qualified.
H. (i) the Board of Directors of Landmark has (x) determined that the Landmark Merger upon the
terms and subject to the conditions set forth in this Agreement is advisable, fair to and in the
best interests of Landmark and the stockholders of Landmark and (y) recommended to the stockholders
of Landmark approval of the Landmark Merger; and (ii) the Board of Directors of Standard Aero has
(1) determined that the Standard Merger upon the terms and subject to the conditions set forth in
this Agreement is advisable, fair to and in the best interests of Standard Aero and the
stockholders of Standard Aero and (2) recommended to the stockholders of Standard Aero approval of
the Standard Merger.
I. Concurrently with the execution and delivery of this Agreement (and deemed to occur
immediately following such execution and delivery), (i) the holders of Landmark Common Stock who
hold, in the aggregate, a number of shares of Landmark Common Stock entitled to cast votes in
excess of that number of votes necessary for the adoption of this
2
Agreement and the approval of the Landmark Merger and the other transactions contemplated
hereby and relating to the Landmark Merger, including Carlyle Landmark as the holder of 490,579
shares of Class A Common Stock of Landmark (which constitutes all of the issued and outstanding
shares of such Class A Common Stock), have executed and delivered to Landmark the Landmark
Stockholder Written Consent (as defined below), and (ii) the holders of Standard Common Stock who
hold, in the aggregate, a number of shares of Standard Common Stock entitled to cast votes in
excess of that number of votes necessary for the adoption of this Agreement and the approval of the
Standard Merger and the other transactions contemplated hereby and relating to the Standard Merger,
including Carlyle Standard as the holder of 2,024,452 shares of Standard Common Stock, have
executed and delivered to Standard Aero the Standard Stockholder Written Consent (as defined
below).
J. For certain limited purposes, and subject to the terms set forth herein, TC Group shall
serve as a representative of the holders of Landmark Common Stock, Landmark Vested Options,
Standard Common Stock and Standard Vested Options.
K. Certain capitalized terms used herein have the meanings ascribed to such terms in Article I
hereof.
AGREEMENT
In order to consummate the Mergers, and in consideration of the mutual agreements hereinafter
contained, Acquiror, the Merger Subs, and the Companies, agree as follows:
ARTICLE I.
CERTAIN DEFINITIONS
CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
“Acquiror” has the meaning specified in the preamble hereto.
“Acquiror Cure Period” has the meaning specified in Section 10.1(c).
“Action” means any claim, action, suit, audit, assessment, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
“Affiliate” means, with respect to any specified Person, any Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such specified Person,
through one or more intermediaries or otherwise. For the purposes of this definition,
“control” (including, with correlative meaning, the terms “controlling,”
“controlled by” and “under common control with”) means the possession, directly or
indirectly, of the power to direct or cause the direction of management and policies of such
Person through the ownership of the voting securities, by contract or otherwise.
***
3
“Aggregate Fully-Diluted Landmark Common Shares” has the meaning specified in Section
2.1(d).
“Aggregate Fully-Diluted Standard Common Shares” has the meaning specified in Section
2.2(d).
“Aggregate Landmark Option Exercise Price” has the meaning specified in Section
2.1(d).
“Aggregate Standard Option Exercise Price” has the meaning specified in Section
2.2(d).
“Agreement” has the meaning specified in the preamble hereto.
“Aircraft Financing Indebtedness” means the lesser of (x) $40,000,000 and (y) an
amount equal to the aggregate Indebtedness of Landmark and its Subsidiaries incurred for the
purpose of financing with the proceeds of such Indebtedness the acquisition of aircraft, air
frames, engines, avionics and equipment affixed to aircraft under (i) Indebtedness incurred under
that certain Loan and Security Agreement, dated December 19, 2005, between Piedmont Hawthorne
Aviation, L.L.C. and 1st Source Bank and (ii) Indebtedness incurred under that certain Loan
Agreement, dated as of August 27, 2004, as amended, by and between Piedmont Hawthorne Aviation,
Inc. and Branch Bank and Trust Company and participating lenders thereunder or any renewals or
replacements thereof, including any Indebtedness incurred under Landmark’s existing senior credit
facility to the extent the proceeds thereof are used to purchase aircraft, air frames, engines,
avionics and equipment affixed to aircraft.
“Antitrust Authorities” means the Antitrust Division of the United States Department
of Justice, the United States Federal Trade Commission, the Competition Commissioner or the
antitrust or competition law authorities of any other jurisdiction (whether United States, foreign
or multinational).
“Approval” has the meaning specified in Section 3.14(c)(ii).
“Assets” means all properties, assets and rights of any kind, whether tangible or
intangible, real or personal, owned, leased or licensed by either Company or any of their
respective Subsidiaries or in which any such Person has any interest whatsoever (in each case,
solely to the extent of such Person’s interest therein).
“Bid” has the meaning specified in Section 3.27(a)(i).
“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to close.
“Carlyle Landmark” means Carlyle Piedmont Domestic Partners, L.P., a Delaware limited
partnership.
“Carlyle Standard” means Carlyle Partners III, L.P., a Delaware limited partnership.
4
“Cash Per Fully-Diluted Landmark Common Share” has the meaning specified in Section
2.1(d).
“Cash Per Fully-Diluted Standard Common Share” has the meaning specified in Section
2.2(d).
“Certificates” has the meaning specified in Section 2.3(c).
“CFIUS” has the meaning specified in Section 7.3.
“CFIUS Approval” has the meaning specified in Section 7.3.
“Cleanup” means all actions required to (i) cleanup, remove, treat or remediate
Hazardous Materials in the indoor or outdoor environment in accordance with Environmental Laws, or
(ii) perform pre-remedial studies and investigations and post-remedial monitoring and care as
required by a Governmental Authority pursuant to Environmental Laws.
“Closing” has the meaning specified in Section 8.2.
“Closing Date” has the meaning specified in Section 8.2.
“Code” means the Internal Revenue Code of 1986, as amended.
“Combined Companies” means Landmark, Standard Aero and their respective Subsidiaries,
taken as a whole.
“Company” has the meaning specified in the preamble hereto.
“Company Cure Period” has the meaning specified in Section 10.1(b).
“Competing Transaction” has the meaning specified in Section 5.4(a).
“Competition Act” means the Competition Act (Canada), R.S.C. 1985, c. C-34, as
amended.
“Competition Commissioner” means the Commissioner of Competition appointed under the
Competition Act.
“Confidentiality Agreement” has the meaning specified in Section 12.11.
“Contract” means any contract (written or oral), agreement, subcontract, lease,
license, note, mortgage, indenture, bond, guarantee of indebtedness, or credit agreement,
franchise, arrangement or commitment, purchase orders, or instrument.
“DGCL” has the meaning specified in the Section entitled “Plan of Merger.”
“Debt Commitment Letter” has the meaning specified in Section 4.6.
“Debt Financing” has the meaning specified in Section 5.5.
5
“Dissenting Landmark Common Shares” has the meaning specified in Section 2.1(a).
“Dissenting Landmark Stockholders” has the meaning specified in Section 2.1(a).
“Dissenting Standard Common Shares” has the meaning specified in Section 2.2(a).
“Dissenting Standard Stockholders” has the meaning specified in Section 2.2(a).
“DoD” has the meaning specified in Section 7.3.
“DoT” has the meaning specified in Section 6.5.
“Draw Certificate” has the meaning specified in Section 7.5.
“Effective Time of the Landmark Merger” has the meaning specified in Section 2.4.
“Effective Time of the Mergers” means the Effective Time of the Landmark Merger or the
Effective Time of the Standard Merger, each individually or collectively, as the context so
requires.
“Effective Time of the Standard Merger” has the meaning specified in Section 2.4.
“Employee Plans” has the meaning specified in Section 3.14(a)(i).
“Employment Laws” has the meaning specified in Section 3.15(e).
“Environmental Claim” means any actual or threatened claim, notice, cause of action,
suit, decree, demand, lien, order or complaint by a Governmental Authority or any other Person,
alleging liability, including potential liability, for investigatory costs, Cleanup costs, all
reasonable fees, disbursements and expenses of counsel, expert and consulting fees and costs,
natural resources damages, property damages, personal injuries, or penalties arising out of, based
on, or resulting from, (i) the presence, Release or threatened Release of any Hazardous Materials
at a location, currently or formerly owned or operated by either Company (or the Companies) or any
of their respective Subsidiaries, or at any third party location at which either Company (or the
Companies) or any of their respective Subsidiaries, or any other Person whose liability for any
Environmental Claim either Company (or the Companies) or any Subsidiary has or may have retained or
assumed either by Contract or by operation of Law sent, or caused to be sent, Hazardous Materials,
or (ii) any violation, or alleged violation, of any Environmental Law.
“Environmental Laws” means, as of the date hereof, all applicable and legally
enforceable foreign, federal, state and local statutes or laws, common law, judgments, orders,
regulations, licenses, permits, rules and ordinances relating to pollution or protection of health,
safety or the environment, including Laws relating to Releases or threatened Releases of Hazardous
Materials, the manufacture, processing, distribution, use, treatment, storage, Release, transport
or handling of Hazardous Materials, including, but not limited to, the Federal Water
6
Pollution Control Act (33 U.S.C.ss.1251 et seq.), Resource Conservation and Recovery Act (42
U.S.C.ss.6901 et seq.), Safe Drinking Water Act (42 U.S.C.ss.3000(f) et seq.), Toxic Substances
Control Act (15 U.S.C.ss.2601 et seq.), Clean Air Act (42 U.S.C.ss.7401 et seq.), Oil Pollution Act
of 1990, Comprehensive Environmental Response, Compensation and liability Act (42 U.S.C.ss.9601 et
seq.), the Endangered Species Act (16 U.S.C.ss.1531 et seq.), and other similar state and local
statutes.
“Environmental Permits” has the meaning specified in Section 3.23(a).
“ERISA” has the meaning specified in Section 3.14(a)(ii).
“ERISA Affiliate” has the meaning specified in Section 3.14(a)(iii).
***
“Evaluation Materials” means as to any party hereto, all non-public information
furnished to such party by the other parties hereto in connection with the transactions
contemplated hereby relating to the disclosing party or the disclosing party’s Affiliates, whether
furnished orally or in writing or gathered by inspection, together with analyses, compilations,
studies or other documents prepared by any party, or by such party’s agents, representatives
(including attorneys, accountants and financial advisors) or employees, which contain or otherwise
reflect such information, provided that the term Evaluation Materials shall not include information
that (i) is or becomes generally available to the public other than as a result of a disclosure in
violation of the terms hereof or the Confidentiality Agreement, (ii) was or becomes available to a
party hereto on a non-confidential basis from a source other than any other party hereto or their
representatives and affiliates, provided that such source is not prohibited from disclosing such
information by a contractual, legal or fiduciary obligation to any party hereto or any of their
respective representatives, or (iii) has been or is independently developed by the party to which
such information was furnished and not derived from the Evaluation Materials.
“Exchange Act” means the Exchange Act of 1934, as amended.
“Exchange Agent” has the meaning specified in Section 2.3(a).
“Exon-Xxxxxx Amendment” means the Exon-Xxxxxx Amendment of the Defense Production Act
of 1950, as amended.
***
7
“FBO Business” shall mean the airport services segment of the business of Landmark and
its Subsidiaries as conducted as of the date hereof, including the following businesses and
operations conducted by Landmark and its Subsidiaries and the assets and liabilities used primarily
in connection with such business and operations: (i) the thirty-three (33) fixed base operations
locations and the provision of related services including, fueling, hangar rental, de-icing,
aircraft charter and management services, aircraft cleaning and catering, (ii) the brokering and
sale of aircraft and aircraft parts (except to the extent related to Landmark’s maintenance, repair
and overhaul or completions activities and currently reported as part of those segments of
Landmark’s business), and (iii) the maintenance, repair and overhaul services conducted by Landmark
and its Subsidiaries at all locations, other than the maintenance, repair and overhaul businesses
and operations conducted by Landmark and its Subsidiaries in Little Rock, Arkansas, Los Angeles,
California, Augusta, Georgia, Houston, Texas, Dallas, Texas, Omaha, Nebraska and Springfield,
Illinois.
“FBO Business Interest Carrying Cost” shall mean an amount equal to (i) the interest
accrued during the period from the Closing Date to the date the FBO Business Sale Transaction is
consummated on all Indebtedness outstanding during such period under the Asset Sale Facility (as
defined in the Debt Commitment Letters), minus (ii) 50% of the aggregate amount of interest accrued
on the FBO Sale Proceeds Escrow Amount.
***
“FBO Disposition Date” means the first anniversary of the Closing Date.
“FBO Financial Advisor” means Xxxxxxx Xxxxx or such other nationally recognized
investment bank acceptable to CFIUS in accordance Section 7.4(a).
“FBO Transaction Activity” has the meaning specified in Section 2.11(a).
***
8
***
“FBO Subsidiaries” means Piedmont Hawthorne Aviation, LLC, Piedmont/Hawthorne Canada,
LLC and their respective Subsidiaries.
“Foreign Plan” has the meaning specified in Section 3.14(c)(ix).
“Funding Amount” has the meaning specified in Section 2.3(a).
“GAAP” means United States generally accepted accounting principles in effect from
time to time, applied consistently throughout the periods involved.
“Government Contract” has the meaning specified in Section 3.27(a)(ii).
“Government Prime Contract” has the meaning specified in Section 3.27(a)(iii).
“Government Subcontract” has the meaning specified in Section 3.27(a)(iv).
“Governmental Authority” means any federal, state, municipal, local or foreign
government, governmental authority, regulatory or administrative agency, governmental commission,
department, board, bureau, agency or instrumentality, court, tribunal, arbitrator or judicial or
arbitral body.
“Governmental Order” means any order, judgment, injunction, decree, agreement, writ,
stipulation, determination or award entered by or with any Governmental Authority.
“Hazardous Materials” means all substances, wastes or materials defined or regulated
as hazardous substances, oils, pollutants or contaminants in the National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R. § 300.5, or any other Environmental Law, including
without limitation fuels, toxic mold and friable asbestos.
“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.
“Holder Allocable Expense Payment Schedule” has the meaning specified in Section 2.5.
“Holder Allocable Expenses” has the meaning specified in Section 2.5.
“Holder Representative” has the meaning specified in Section 11.1.
“Indebtedness” of any Person as of any date means, without duplication, (i) the
principal of in respect of (A) indebtedness of such Person and its consolidated Subsidiaries for
money borrowed and (B) indebtedness evidenced by notes, debentures, bonds, letters of credit or
other similar instruments for the payment of which any of them is responsible or liable, (ii) all
obligations of such Person and its consolidated Subsidiaries, in respect of leases required to be
capitalized in accordance with GAAP, required to be reflected as indebtedness on a consolidated
9
balance sheet of such Person and its consolidated Subsidiaries as of such date prepared in
accordance with GAAP, (iii) the deferred purchase price of assets purchased by such Person due more
than six months after the purchase of the asset in question (other than ordinary course trade
accounts payable), (iv) conditional sale or other title retention agreements, (v) reimbursement
obligations of such Person with respect to any letters of credit to the extent such letters of
credit have been drawn by the beneficiary thereof (without duplication of any indebtedness
supported or guaranteed thereby), (vi) the guaranty of the Indebtedness of any Person other then
the Companies or any of their Subsidiaries, and (vii) accrued and unpaid interest, penalties and
other amounts owing in respect of the items described in the foregoing clauses (i) through (vi),
including, in each case, any indebtedness incurred or assumed in connection with Permitted
Acquisitions, as applicable; provided, however, notwithstanding clauses (i) through
(vii) above, Indebtedness of such Person shall not include (A) any redemption premium, change in
control payments or other similar amounts to the extent such amounts are payable as a result of the
consummation of the transactions contemplated hereby or the redemption, repayment or refinancing of
any of the foregoing by Acquiror, the Surviving Corporations or their Subsidiaries at or following
the Closing or (B) any indebtedness identified in the foregoing clauses (i) through (vii) owing by
the Companies or any of their consolidated Subsidiaries solely to either of the Companies or any of
their consolidated Subsidiaries.
“Independent Appraiser” has the meaning specified in Section 2.11(c)(ii).
“Information Statement” has the meaning specified in Section 5.7.
“Intellectual Property” means (i) all domestic and foreign trademarks, service marks,
logos, corporate names, protected models, designs, created works, trade names, domain names or
other trade rights of either Company or its respective Subsidiaries and any registrations thereof,
(ii) pending applications by either Company or its respective Subsidiaries for any of the rights in
the foregoing clause (i), (iii) rights in or to patents (including all related continuations,
continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions
thereof) and copyrights (whether or not registered) and pending applications therefor of either
Company or its respective Subsidiaries, (iv) all trade secrets, designs, plans, specifications,
technology, software (other than commercial off-the-shelf software), know-how, methods, concepts,
and other proprietary rights, whether or not registered, and (v) rights under any licenses of
either Company or its respective Subsidiaries to use any of the foregoing types of intellectual
property.
“Landmark” has the meaning specified in the preamble hereto.
“Landmark Certificate of Merger” has the meaning specified in the Section entitled
“Plan of Merger.”
“Landmark Common Shares” has the meaning specified in Section 2.1(a).
“Landmark Common Stock” means the Class A Common Stock, par value $.01 per share, and
Class B Common Stock, par value $.01 per share, of Landmark.
“Landmark Constituent Corporations” has the meaning specified in the Section entitled
“Plan of Merger.”
10
“Landmark Financial Statements” has the meaning specified in Section 3.8(a).
“Landmark Merger” has the meaning specified in the Section entitled “Plan of Merger.”
“Landmark Merger Consideration” has the meaning specified in Section 2.1(c).
“Landmark Merger Sub” has the meaning specified in the preamble hereto.
“Landmark Stockholder Written Consent” has the meaning specified in Section 3.3(c).
“Landmark Surviving Corporation” has the meaning specified in the Section entitled
“Plan of Merger.”
“Landmark Vested Options” has the meaning specified in Section 2.1(a).
“Leased Real Property” means all real property leased by a Company or any of its
Subsidiaries, the lease of which may not be terminated at will, or by giving notice of 90 days or
less, without cost or penalty and provides for annual rental payments in excess of $250,000.
“Letter of Credit” has the meaning specified in Section 7.5.
“Letter of Credit Termination Event” has the meaning specified in Section 7.5.
“Licenses” means all of the licenses, permits, consents, certificates (including
supplemental type certificates), registrations, exemptions and other approvals or authorizations,
in each case issued or given by any Governmental Authority and required for the ownership, leasing
or operation of the Assets of either Company or any of their respective Subsidiaries or the conduct
of their business as conducted on the date hereof.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, encumbrance, charge,
security interest, equitable interest, restriction on transfer, conditional sale or other title
retention device or arrangement (including a capital lease), transfer for the purpose of subjection
to the payment of any Indebtedness, or restriction on the creation of any of the foregoing, whether
relating to any property or right or the income or profits therefrom or other lien of any kind.
“LKE EBITDA” has the meaning specified in Section 2.11(c)(ii).
“LKE Property Ratio” has the meaning specified in Section 2.11(c)(ii).
“LKE Transaction” has the meaning specified in Section 2.11(c)(ii).
“LKE Transaction Proceeds” has the meaning specified in Section 2.11(c)(ii).
“Loss Bid” means any outstanding offer (or group of related offers) made by the either
Company or their respective Subsidiaries to provide goods or services to any customer which, if
accepted by the offeree, such Company or its Subsidiaries reasonably expects, based on
11
such Company or Subsidiaries most current cost information as of the date such offer (or group
of related offers) is made by the Company, to result in a loss (based on the calculation of gross
profit under GAAP) over the full performance of the Contract.
“LTM EBITDA” has the meaning specified in Section 2.11(c)(ii).
“Majority Holders” has the meaning specified in Section 11.1.
“Material Contracts” has the meaning specified in Section 3.13(a).
“Material Adverse Effect” means, with respect to the Combined Companies, any change or
event, that has, or would reasonably be expected to have, a material adverse effect on the assets,
business, condition (financial or otherwise) or results of operations of the Combined Companies;
provided, however, that none of the following, or any change or event, resulting or
arising from the following, shall constitute, or shall be considered in determining whether there
has occurred, a Material Adverse Effect: (a) economic factors affecting the national, regional or
world economy or acts of war or terrorism; (b) factors generally affecting the industries or
markets in which the Combined Companies operate; (c) (i) actions required by the parties pursuant
to this Agreement or (ii) the announcement of the transactions contemplated hereby including,
without limitation, delays or cancellations of orders for services or losses of employees arising
from such announcement, (d) changes in law, rules or regulations; (e) changes in generally accepted
accounting principles or the interpretation thereof; and (f) any failure by the Combined Companies
to meet any projections, estimates, forecasts or milestones; provided, that the reason or
matter that caused the Combined Companies to fail to meet any such projections, estimates or
forecasts is not itself a Material Adverse Effect; and provided, further, that none
of the factors, changes or effects set forth in clause (b) above has not had, and would not
reasonably be expected to have, a disproportionate impact on the Combined Companies compared to
companies operating in the industries or markets in which the Combined Companies operate.
“Multiemployer Plan” has the meaning specified in Section 3.14(a)(iv).
“OFAC” has the meaning specified in Section 3.26.
“Owned Real Property” means all real property owned by a Company or any of its
Subsidiaries.
“Pension Plan” has the meaning specified in Section 3.14(a)(v).
“Permitted Acquisitions” means (i) the proposed acquisitions disclosed to, and agreed
upon by, Acquiror in writing on the date hereof, so long as the Permitted Acquisition Purchase
Price (other than fees and expenses incurred by either Company in connection therewith) (x) is no
greater than the maximum Permitted Acquisition Purchase Price proposed to be paid by Acquiror with
respect to such acquisition and disclosed to Acquiror in writing on the date hereof and (y) as of
the date of the agreement with respect to such Permitted Acquisition is entered into, implies no
greater a multiple of the estimated 2007 pro forma EBITDA than the maximum EBITDA multiple
disclosed to, and agreed upon by, Acquiror in writing on the date
12
hereof, and (ii) such other acquisitions as may be consented to in writing by Acquiror in its
sole discretion after the date hereof.
“Permitted Acquisition Purchase Price” means, with respect to either Company, the
aggregate purchase price paid by the Company in respect of any Permitted Acquisitions that are
consummated on or prior to the Closing Date (including the aggregate amount of any Indebtedness
assumed in connection with such Permitted Acquisitions), plus all documented fees and expenses
incurred by such Company in connection therewith (other than any such fee payable to an Affiliate
of such Company).
“Permitted Liens” means (i) mechanics, materialmen’s and similar Liens with respect to
any amounts not yet due and payable or which are being contested in good faith through appropriate
proceedings and for which the relevant party or a Subsidiary of the relevant party has established
adequate reserves to the extent required by GAAP, (ii) Liens for Taxes not yet due and payable or
which are being contested in good faith through appropriate proceedings and for which the relevant
party or a Subsidiary of the relevant party has established adequate reserves to the extent
required by GAAP, (iii) Liens securing rental payments under capital lease agreements, (iv)
encumbrances and restrictions on real property (including easements, covenants, rights of way and
similar restrictions of record) that do not materially interfere with the present uses of such real
property, (v) Liens securing payment, or any other obligations, of a Company or its Subsidiaries
with respect to Indebtedness, and (vi) Liens described on Schedule 1.1.
“Person” means any individual, firm, corporation, partnership, limited liability
company, incorporated or unincorporated association, joint venture, joint stock company,
governmental agency or instrumentality or other entity of any kind.
“Required Stockholder Vote” has the meaning set forth in Section 3.3(c).
“Related Party Transaction” has the meaning set forth in Section 3.25.
“Release” means any actual or threatened release, spill, emission, discharge, leaking,
pumping, injection, deposit, disposal, dispersal, leaching or migration into the indoor or outdoor
environment (including ambient air, surface water, groundwater and surface or subsurface strata or
the abandonment or disposal of any barrels, containers or other closed receptacles containing
Hazardous Materials) of Hazardous Materials, including the movement of Hazardous Materials through
or in the air, soil, surface water, groundwater or real property.
“Xxxxxxxx-Xxxxx Act” has the meaning specified in Section 3.8(a)(ii).
“Schedule Update” has the meaning specified in Section 12.9.
“Sharing Percentage” means 31%.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“SDN List” has the meaning specified in Section 3.26.
13
“SkyWest Escrowed Cash” means restricted cash of Standard Aero and its consolidated
Subsidiaries that is held in escrow for the benefit of SkyWest Airlines, Inc. pursuant to that
certain Escrow Trust Agreement, effective June 30, 2004, among SkyWest Airlines, Inc., Standard
Aero Limited and Xxxxx Fargo Bank Northwest, National Association.
“Standard Aero” has the meaning specified in the preamble hereto.
“Standard Certificate of Merger” has the meaning specified in the Section entitled
“Plan of Merger.”
“Standard Common Shares” has the meaning specified in Section 2.2(a).
“Standard Common Stock” means the common stock, par value $.01 per share, of Standard
Aero.
“Standard Constituent Corporations” has the meaning specified in the Section entitled
“Plan of Merger.”
“Standard Merger” has the meaning specified in the Section entitled “Plan of Merger.”
“Standard Merger Consideration” has the meaning specified in Section 2.2(c).
“Standard Merger Sub” has the meaning specified in the preamble hereto.
“Standard Reports” has the meaning specified in Section 3.8(a)(ii).
“Standard Stockholder Written Consent” has the meaning specified in Section 3.3(c).
“Standard Surviving Corporation” has the meaning specified in the Section entitled
“Plan of Merger.”
“Standard Vested Options” has the meaning specified in Section 2.2(a).
“State and Local Government” has the meaning specified in Section 3.27(a)(v).
“Subsidiary” means, with respect to a Person, a corporation or other entity of which
50% or more of (i) the voting power of the equity securities or equity interests or (ii) the
interest in the capital or profits of such Person, in each case, is owned, directly or indirectly,
by such Person.
“Tax” shall mean any tax, assessment, duty, fee, or other charge imposed or collected
by any government or political subdivision thereof or any tax authority thereunder, including, but
not limited to, any income, gross income, gross receipts, profits, capital stock, franchise,
withholding, payroll, social security, premium, guarantee fund, workers compensation, unemployment,
disability, property, ad valorem, stamp, excise, environmental, customs duties, severance,
occupation, service, sales, use, license, registration, lease, transfer, import, export,
14
value added, municipal service, social contribution, minimum, alternative minimum, estimated
or other tax (including any assessment, duty, fee or other charge in the nature of or in lieu of
any such tax), any amounts due under any tax sharing, indemnity or similar agreement and any
interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
“Tax Returns” has the meaning specified in Section 3.16(a).
“Tax Sharing Agreements” has the meaning specified in Section 3.16(g).
“Taxable EBITDA” has the meaning specified in Section 2.11(c)(ii).
“Taxable Property Ratio” has the meaning specified in Section 2.11(c)(ii).
***
“Teaming Agreement” has the meaning specified in Section 3.27(a)(vi).
“Terminating Acquiror Breach” has the meaning specified in Section 10.1(c).
“Terminating Company Breach” has the meaning specified in Section 10.1(b).
“Termination Date” shall mean the date that is 125 days after the date hereof.
Notwithstanding the foregoing, in the event that as of the date that is 125 days after the date
hereof all of the conditions to Closing set forth in Article IX have been satisfied or waived by
the party entitled to waive such condition (other than the conditions set forth in Sections 9.1(b),
9.2(d) and 9.3(c)) and the Closing has not occurred on or before such date, if Acquiror or the
Holder Representative reasonably believes that it is more likely than not that the Companies and
Acquiror will obtain the CFIUS Approval if the Termination Date is extended, either Acquiror or the
Holder Representative may elect to extend the Termination Date for a period of up to 90 days upon
delivery of written notice to the other party no later than three (3) Business Days prior to such
125th day (and the Termination Date shall be extended for the number of days specified in such
notice and shall thereafter mean the date specified in such notice); provided,
however, that (x) in no event may the Termination Date be extended beyond the date that is
215 days after the date hereof without the prior written consent of Acquiror and the Holder
Representative, (y) if both Acquiror and the Holder Representative deliver such a written notice
extending the Termination Date, the Termination Date shall be extended to the date that is the
later of the dates specified in such written notices and the party which delivered the notice with
such later Termination Date shall be deemed to have extended the Termination Date for the purposes
of clause (z), and (z) in the event Acquiror extends the initial Termination Date in accordance
with the foregoing and provided that each of the Companies shall have delivered to Acquiror no
later than the Business Day immediately preceding the date that is 125 days after the date hereof a
certificate signed by an officer of such Company, dated as of the date of delivery thereof,
certifying that, to the knowledge and belief of such officer, the conditions specified in Section
9.2 (other than Section 9.2(d)) have been fulfilled as of the date hereof and as of the date of
such certificate (in lieu of the Closing Date), then Acquiror, Standard Merger Sub and Landmark
Merger Sub shall be deemed to have irrevocably waived for all purposes hereunder each of the
conditions to their obligations to consummate or cause to be consummated the Mergers set forth in
Sections 9.1 and 9.2 other than the conditions set forth in Sections (i) 9.1(b), (ii) 9.1(d), (iii)
15
9.2(b), but only in respect of the period from the delivery of the above mentioned officer’s
certificate through the Closing Date, and (iv) 9.2(d), but only for purposes of certifying
compliance with clause (iii) of this sentence.
“Unaffiliated Person” means a Person other than (i) Acquiror, the Companies, their
respective Affiliates or any employee, officer or director of any of the foregoing, or (ii) any
Person in which any Person described in clause (i) has a direct or indirect equity interest.
“United States Government” has the meaning specified in Section 3.27(a)(vii).
“WARN Act” has the meaning specified in Section 3.10.
As used herein, the phrase “to the knowledge” of any Person shall mean the actual knowledge
after due inquiry of (i) in the case of Landmark, the persons set forth on Schedule 1.2,
(ii) in the case of Standard Aero, the persons set forth on Schedule 1.3, and (iii) in the
case of Acquiror, the persons set forth on Schedule 1.4.
ARTICLE II.
THE MERGERS
THE MERGERS
2.1 Conversion of Landmark Company Shares and Landmark Vested Options.
(a) At the Effective Time of the Landmark Merger, by virtue of the Landmark Merger and without
any action on the part of any holder of Landmark Common Stock, (i) each share (a “Landmark
Common Share”) of Landmark Common Stock that is then issued and outstanding (other than shares
of Landmark Common Stock, if any, held in the treasury of Landmark, which treasury shares shall be
canceled as part of the Landmark Merger, and other than shares (each, a “Dissenting Landmark
Common Share”) of Landmark Common Stock held by Persons who object to the Landmark Merger and
comply with the provisions of the DGCL concerning the rights of holders of Landmark Common Stock to
dissent from the Landmark Merger and require appraisal of their shares of Landmark Common Stock
(the “Dissenting Landmark Stockholders”), which Dissenting Landmark Common Shares shall not
constitute “Landmark Common Shares” hereunder) and (ii) each unexercised and outstanding option to
purchase Landmark Common Shares (to the extent vested immediately prior to the Effective Time of
the Landmark Merger, including any option that vests as a result of the action of the Board of
Directors of Landmark) that is then outstanding as of immediately prior to the Effective Time of
the Landmark Merger (such vested options collectively being referred to as the “Landmark Vested
Options”), shall thereupon be converted into and become the right to receive the applicable
portion of the Landmark Merger Consideration, as determined pursuant to Section 2.1(d).
(b) At the Effective Time of the Landmark Merger, by virtue of the Landmark Merger and without
any action on the part of Acquiror or Landmark Merger Sub, each share of common stock, par value
$0.01 per share, of Landmark Merger Sub shall be converted into one share of common stock, par
value $0.01 per share, of the Landmark Surviving Corporation.
(c) Subject to adjustment in accordance with Section 2.11, the “Landmark Merger
Consideration” shall consist of Seven Hundred Sixty-Six Million Dollars ($766,000,000)
16
in cash, less (i) the aggregate principal amount of Indebtedness (other than any Aircraft Financing
Indebtedness) of Landmark and its Subsidiaries, if any, that remains unpaid or outstanding as of
the close of business on the Business Day immediately prior to the Closing Date, plus (ii)
the amount of cash and cash equivalents of Landmark and its Subsidiaries as of the close of
business on the Business Day immediately prior to the Closing Date, plus (iii) the
aggregate Permitted Acquisition Purchase Price paid by Landmark or its Subsidiaries on or prior to
the Closing Date, less (iv) ***, less (v) a portion
of the aggregate amount of Holder Allocable Expenses paid to the Exchange Agent at Closing in
accordance with Section 2.5, which portion shall be determined by the Companies and written notice
of such determination shall be delivered in writing to Acquiror at least three (3) Business Days
prior to the Closing.
(d) The Landmark Merger Consideration shall be allocated among the holders of the Landmark
Common Shares and the Landmark Vested Options as set forth below in this Section 2.1(d). Each
holder of Landmark Common Shares immediately prior to the Effective Time of the Landmark Merger
shall be entitled to receive a portion of the Landmark Merger Consideration equal to (x) the Cash
Per Fully-Diluted Landmark Common Share (as defined below), multiplied by (y) the
number of Landmark Common Shares held by such holder immediately prior to the Effective Time of the
Landmark Merger (but not including any Landmark Common Shares issuable upon the exercise of any
Landmark Vested Options held by such holder immediately prior to the Effective Time of the Landmark
Merger). Each holder of Landmark Vested Options shall be entitled to receive a portion of the
Landmark Merger Consideration equal to (i) the Cash Per Fully-Diluted Landmark Common Share,
multiplied by the aggregate number of Landmark Common Shares issuable upon exercise
in full of all such Landmark Vested Option held by such holder immediately prior to the Effective
Time of the Landmark Merger, minus (ii) the aggregate exercise price payable upon exercise
of such Landmark Vested Option held by such holder immediately prior to the Effective Time of the
Landmark Merger. For purposes of the foregoing, the “Cash Per Fully-Diluted Landmark Common
Share” shall mean (1) the sum of (A) the Landmark Merger Consideration, plus (B) the
Aggregate Landmark Option Exercise Price (defined below), divided by (2) the
Aggregate Fully-Diluted Landmark Common Shares (defined below). The “Aggregate Fully-Diluted
Landmark Common Shares” shall mean (i) the sum of the Landmark Common Shares held by all
holders immediately prior to the Effective Time of the Landmark Merger, plus (ii) the
aggregate number of Landmark Common Shares issuable upon the exercise in full of all Landmark
Vested Options held by all holders immediately prior to the Effective Time of the Landmark Merger,
plus (iii) the aggregate number of Dissenting Landmark Common Shares. The “Aggregate
Landmark Option Exercise Price” shall mean the sum of the exercise prices payable upon exercise
in full of all Landmark Vested Options held by all holders of Landmark Vested Options immediately
prior to the Effective Time of the Landmark Merger.
(e) Each unexercised and outstanding option to purchase Landmark Common Stock which is not a
Landmark Vested Option shall terminate upon the Effective Time of the Landmark Merger.
2.2 Conversion of Standard Company Shares and Standard Vested Options.
17
(a) At the Effective Time of the Standard Merger, by virtue of the Standard Merger and
without any action on the part of any holder of Standard Common Stock, (i) each share (a
“Standard Common Share”) of Standard Common Stock that is then issued and outstanding
(other than shares of Standard Common Stock, if any, held in the treasury of Standard, which
treasury shares shall be canceled as part of the Standard Merger, and other than shares (each, a
“Dissenting Standard Common Share”) of Standard Common Stock held by Persons who object to
the Standard Merger and comply with the provisions of the DGCL concerning the rights of holders of
Standard Common Stock to dissent from the Standard Merger and require appraisal of their shares of
Standard Common Stock (the “Dissenting Standard Stockholders”), which Dissenting Standard
Common Shares shall not constitute “Standard Common Shares” hereunder) and (ii) each unexercised
and outstanding option to purchase Standard Common Shares (to the extent vested immediately prior
to the Effective Time of the Standard Merger, including any option that vests as a result of the
action of the Board of Directors of Standard Aero) that is then outstanding as of immediately prior
to the Effective Time of the Standard Merger (such vested options collectively being referred to as
the “Standard Vested Options”), shall thereupon be converted into and become the right to
receive the applicable portion of the Standard Merger Consideration, as determined pursuant to
Section 2.2(d).
(b) At the Effective Time of the Standard Merger, by virtue of the Standard Merger and without
any action on the part of Acquiror or Standard Merger Sub, each share of common stock, par value
$0.01 per share, of Standard Merger Sub shall be converted into one share of common stock, par
value $0.01 per share, of the Standard Surviving Corporation.
(c) The “Standard Merger Consideration” shall consist of One Billion, Thirty-Four
Million Dollars ($1,034,000,000) in cash, less (i) the aggregate principal amount of
Indebtedness of Standard Aero, if any, that remains unpaid or outstanding as of the close of
business on the Business Day immediately prior to the Closing Date, plus (ii) the amount of
cash and cash equivalents of Standard Aero and its Subsidiaries as of the close of business on the
Business Day immediately prior to the Closing Date (other than SkyWest Escrowed Cash), plus
(iii) the aggregate Permitted Acquisition Purchase Price paid by Standard Aero or its Subsidiaries
on or prior to the Closing Date, less (iv) a portion of the aggregate amount of Holder
Allocable Expenses paid by Acquiror to the Exchange Agent at Closing in accordance with Section
2.5, which portion shall be determined by the Companies and written notice of such determination
shall be delivered to Acquiror in writing at least three (3) Business Days prior to the Closing.
The sum of (i) the portion of the aggregate amount of Holder Allocable Expenses determined by the
Companies pursuant to this Section 2.2(c) and (ii) the portion of the aggregate amount of Holder
Allocable Expenses determined by the Companies pursuant to Section 2.1(c) shall equal 100% of the
Holder Allocable Expenses.
(d) The Standard Merger Consideration shall be allocated among the holders of the Standard
Common Shares and the Standard Vested Options as set forth below in this Section 2.2(d). Each
holder of Standard Common Shares shall be entitled to receive a portion of the Standard Merger
Consideration equal to (x) the Cash Per Fully-Diluted Standard Common Share (as defined below),
multiplied by (y) the number of Standard Common Shares held by such holder
immediately prior to the Effective Time of the Standard Merger (but not including any Standard Common Shares issuable upon the exercise of any Standard Vested Options held
18
by such holder immediately prior to the Effective Time of the Standard Merger). Each holder of
Standard Vested Options immediately prior to the Effective Time of the Standard Merger shall be
entitled to receive a portion of the Standard Merger Consideration equal to (i) the Cash Per
Fully-Diluted Standard Common Share, multiplied by the aggregate number of Standard
Common Shares issuable upon exercise in full of such Standard Vested Option held by such holder
immediately prior to the Effective Time of the Standard Merger, minus (ii) the aggregate
exercise price payable upon exercise of such Standard Vested Option held by such holder immediately
prior to the Effective Time of the Standard Merger. For purposes of the foregoing, the “Cash
Per Fully-Diluted Standard Common Share” shall mean (1) the sum of (A) the Standard Merger
Consideration, plus (B) the Aggregate Standard Option Exercise Price (defined below),
divided by (2) the Aggregate Fully-Diluted Standard Common Shares (defined below).
The “Aggregate Fully-Diluted Standard Common Shares” shall mean (i) the sum of the Standard
Common Shares held by all holders immediately prior to the Effective Time of the Standard Merger,
plus (ii) the aggregate number of Standard Common Shares issuable upon the exercise in full
of all Standard Vested Options held by all holders immediately prior to the Effective Time of the
Standard Merger, plus (iii) the aggregate number of Dissenting Standard Common Shares. The
“Aggregate Standard Option Exercise Price” shall mean the sum of the exercise prices
payable upon exercise in full of all Standard Vested Options held by all holders of Standard Vested
Options immediately prior to the Effective Time of the Standard Merger.
(e) Each unexercised and outstanding option to purchase Standard Common Stock which is not a
Standard Vested Option shall terminate upon the Effective Time of the Standard Merger.
2.3 Payment and Exchange of Certificates.
(a) Immediately prior to the Effective Times of the Mergers, Acquiror shall pay to an exchange
agent (the “Exchange Agent”) selected by Acquiror and reasonably acceptable to the
Companies, by wire transfer of immediately available funds, an amount (the “Funding
Amount”) equal to:
(i) (1) the Landmark Merger Consideration, minus (2) the product of (x)
the number of Dissenting Landmark Common Shares and (y) the Cash Per Fully-Diluted
Landmark Common Share; plus
(ii) (1) the Standard Merger Consideration, minus (2) the product of
(x) the number of Dissenting Standard Common Shares and (y) the Cash Per
Fully-Diluted Standard Common Share; plus
(iii)
***
(b) Upon (i) payment by Acquiror to the Exchange Agent of the Funding Amount and (ii) payment
by Acquiror to the Exchange Agent of the estimated Holder Allocable Expenses pursuant to Section
2.5, Acquiror shall have satisfied its obligations to make payments in respect of the Landmark Merger Consideration and the Standard Merger Consideration other
than (x) the obligation of Acquiror or the Landmark Surviving Corporation or the Standard
19
Surviving Corporation, as the case may be, to make payments to Dissenting Landmark Stockholders or Dissenting
Standard Stockholders, if any, following the Effective Times of the Mergers and (y) the obligation
to make any payment in accordance with Section 2.11.
(c) As promptly as practicable after the Effective Time of the Mergers, Acquiror shall cause
the Exchange Agent to mail to each person who was, immediately prior to the Effective Time of the
Mergers, a holder of record of Landmark Common Shares, Landmark Vested Options, Standard Common
Shares or Standard Vested Options: (i) in the case of holders of Landmark Common Shares or Standard
Shares a letter of transmittal substantially in the form attached as Annex C hereto, which
specifies that delivery shall be effected, and risk of loss and title to the certificates
evidencing such Landmark Common Shares or Standard Common Shares (the “Certificates”) shall
pass, only upon proper delivery of the Certificates to the Exchange Agent; (ii) in the case of
holders of Landmark Vested Options or Standard Vested Options, an acknowledgement and release
substantially in the form attached as Annex D hereto (the “Option Acknowledgement”)
which specifies that upon delivery of such Option Acknowledgement and payment by the Exchange Agent
of the portion of the Landmark Merger Consideration or the Standard Merger Consideration, as the
case may be, to which such holder is entitled pursuant to Sections 2.1 or 2.2, as applicable, such
holder is releasing the Landmark Surviving Corporation or the Standard Surviving Corporation, as
the case may be, of all claims with respect to all options to acquire Landmark Common Stock or
Standard Common Stock, as the case may be, that were held by such holder immediately prior to the
Effective Time of the Mergers; and (iii) instructions for use in effecting the surrender of the
Certificates and delivery of the Option Acknowledgements in exchange for the portion of the
Landmark Merger Consideration or the Standard Merger Consideration, as the case may be, to which
such holder is entitled pursuant to Sections 2.1 or 2.2, as applicable. Upon surrender to the
Exchange Agent of a Certificate for cancellation, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto (or in the case of
holders of Landmark Vested Options or Standard Vested Options, an Option Acknowledgement), and such
other documents as may be required pursuant to such instructions, Acquiror shall cause the Exchange
Agent to pay to the holder of such Certificate (or such Landmark Vested Options or Standard Vested
Options), in exchange therefore, the amount of cash in immediately available funds which such
holder has the right to receive in respect of the Landmark Common Shares, Landmark Vested Options,
Standard Common Shares or Standard Vested Options, as the case may be, pursuant to Section 2.1 or
Section 2.2, as applicable, and the Certificate so surrendered (or such Landmark Vested Options or
Standard Vested Options, as the case may be) shall forthwith be canceled. In the event of a
transfer of ownership of Landmark Common Shares or Standard Common Shares that is not registered in
the transfer records of Landmark or Standard Aero, as the case may be, payment of the relevant
portion of the Landmark Merger Consideration or the Standard Merger Consideration, as the case may
be, may be made to a Person other than the Person in whose name the Certificate so surrendered is
registered if the Certificate representing such Landmark Common Shares, or Standard Common Shares
shall be properly endorsed or otherwise be in proper form for transfer and the Person requesting
such payment shall pay any transfer or other Taxes required by reason of the payment of the
relevant portion of the Landmark Merger Consideration or the Standard Merger Consideration, as the
case may be, to a Person other than the registered holder of such Certificate or establish to the
reasonable satisfaction of Acquiror that such Tax has been paid or is not applicable. Notwithstanding
the forgoing, in the event
that any holder of Landmark Common Shares, Landmark Vested Options, Standard Common Shares
20
or Standard Vested Options delivers the Certificate(s) representing such Landmark Common Shares or
Standard Common Shares (or, in the case of holders of Landmark Vested Options or Standard Vested
Options, an Option Acknowledgement) to Acquiror at the Closing, Acquiror shall pay the amount which
such holder is entitled in consideration therefor directly to such holder at the Closing by
initiating a wire transfer of immediately available funds and the Funding Amount payable to the
Exchange Agent shall be reduced by such amounts. Until surrendered as contemplated by this Section
2.3, each Certificate and each Landmark Vested Option and Standard Vested Option shall be deemed at
all times after the Effective Times of the Mergers to represent only the right to receive upon such
surrender (or in the case of Landmark Vested Options and Standard Vested Options, upon delivery of
an Option Acknowledgement with respect thereto) such portion of the Landmark Merger Consideration
or the Standard Merger Consideration, as the case may be, to which the holder of such Certificate
or Landmark Vested Options or Standard Vested Options is entitled pursuant and subject to this
Article II. No interest shall be paid or will accrue on any cash payable to holders of
Certificates pursuant to the provisions of this Article II.
2.4 Effective Times of Mergers; Closing Date. Assuming all of the conditions set forth in
Article IX of this Agreement have been fulfilled or waived, and provided that this Agreement has
not been terminated pursuant to the provisions hereof, on the Closing Date, (i) Landmark Merger Sub
and Landmark shall cause the Landmark Certificate of Merger to be executed and filed with the
Secretary of State of Delaware and (ii) Standard Merger Sub and Standard Aero shall cause the
Standard Certificate of Merger to be executed and filed with the Secretary of State of Delaware, in
each case as provided in Section 251 of the DGCL. For purposes of this Agreement, the
“Effective Time of the Landmark Merger” shall mean the time at which the Landmark
Certificate of Merger has been duly filed in the Office of the Secretary of State of Delaware and
has become effective in accordance with the DGCL, and the “Effective Time of the Standard
Merger” shall mean the time at which the Standard Certificate of Merger has been duly filed in
the Office of the Secretary of State of Delaware and has become effective in accordance with the
DGCL.
2.5 Holder Allocable Expenses. On or prior to the Closing Date, the Companies shall provide to
Acquiror and the Exchange Agent a schedule (the “Holder Allocable Expense Payment
Schedule”) which shall accurately set forth the aggregate amount of the following out-of-pocket
fees and expenses (the “Holder Allocable Expenses”) that have not been paid by the
Companies prior to the close of business on the Business Day immediately prior to the Closing Date
and have actually been, or are reasonably expected to be, incurred by the Companies or by the
Holder Representative or its Affiliates on behalf of the Companies and the holders of the Landmark
Common Shares, Standard Common Shares, Landmark Vested Options and/or Standard Vested Options prior
to, on or after the Closing Date, in each case in connection with the preparation, negotiation and
execution of this Agreement and the consummation of the transactions contemplated hereby (together
with wiring instructions with respect to the payment of such expenses): (i) the fees and
disbursements of outside counsel to the Companies and the Holder Representative incurred in
connection with the Mergers and the other transactions contemplated hereby, (ii) the fees and
expenses of any other agents, advisors, accountants, consultants and experts employed by the
Companies in connection with the Mergers and the other transactions contemplated hereby, (iii) any
transaction fee payable to one or more Affiliates of the Companies in connection with the Mergers
and the other transactions contemplated hereby,
21
(iv) any transaction, retention or other completion
bonus paid or payable to any employee of the Companies or their respective Subsidiaries in
connection with or as a result of the transactions contemplated by this Agreement (excluding any
such bonus that is expressly agreed to in writing or implemented by Acquiror on or prior to
Closing) and (v) the expenses of the Holder Representative or its Affiliates incurred in connection
with the Mergers and the other transactions contemplated hereby, including a reserve with respect
to any incurred but uninvoiced expenses described in clauses (i) through (iv) above. For the
avoidance of doubt, notwithstanding the foregoing, Holder Allocable Expenses shall not include (x)
any fees and expenses incurred by the Companies in connection with any cooperation they provide to
Acquiror pursuant to Section 5.5 with respect to the Debt Financing or Section 7.4(b) with respect
to the FBO Business Sale Transaction, (y) any fees or expenses owed to the independent accountants
or outside counsel of the Companies incurred in the ordinary course of business other than in
connection with the transactions contemplated hereby (including any fees related to the completion
of any audit or review of any financial statements of either Company or the preparation of any
reports or other filings with the SEC), and (z) any amounts payable as a result of the termination
of any officer or employee of the Companies or their Subsidiaries by Acquiror or its Affiliates on
or after the Closing Date. On the Closing Date, Acquiror shall pay to the Exchange Agent cash in
the amount of such actual Holder Allocable Expenses which the Exchange Agent shall disburse in
accordance with the Holder Allocable Expense Payment Schedule. In no event shall Acquiror be
responsible for payment of Holder Allocable Expenses in excess of the cash amounts paid to the
Exchange Agent by Acquiror under this Section 2.5.
2.6 Termination of Exchange Fund. Promptly following the date which is six months after the
Effective Times of the Mergers, Acquiror shall instruct the Exchange Agent to deliver to Acquiror
all cash (other than any Additional Landmark Merger Consideration Amount held by the Exchange Agent
at such time), Landmark Certificates, Standard Certificates and other documents in its possession
relating to the transactions contemplated hereby, and the Exchange Agent’s duties shall terminate
***. Thereafter, each holder of a Certificate (other than those
representing Dissenting Landmark Common Shares or Dissenting Standard Common Shares) may surrender
such Certificate to Acquiror and (subject to applicable abandoned property, escheat and similar
laws) receive in consideration therefor, and Acquiror shall promptly pay, the portion of the
Landmark Merger Consideration or the Standard Merger Consideration, as applicable, deliverable in
respect thereof as determined in accordance with this Article II without any interest thereon.
2.7 Lost, Stolen or Destroyed Certificates. In the event any Landmark Certificate or Standard
Certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Landmark Certificate or Standard Certificate to be lost, stolen or destroyed,
the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificate and, if required by Acquiror, the posting of a bond
in such reasonable amount as Acquiror may direct as indemnity against any claim that may be made
against it or the Companies with respect to such Certificate, the Landmark Merger Consideration or
Standard Merger Consideration, as applicable, deliverable in respect thereof as determined in
accordance with this Article II.
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2.8 Dissenting Common Shares. Notwithstanding the foregoing provisions of this Article II, the
Dissenting Landmark Common Shares and Dissenting Standard Common Shares shall not be converted into
a right to receive the Landmark Merger Consideration or Standard Merger Consideration, as
applicable, and the holders thereof shall be entitled to such rights as are granted by Section 262
of the DGCL. Each holder of Dissenting Landmark Common Shares and Dissenting Standard Common
Shares who becomes entitled to payment for such shares pursuant to Section 262 of the DGCL shall
receive payment therefor from the Landmark Surviving Corporation or the Standard Surviving
Corporation, as applicable, in accordance with the DGCL; provided, however, that
(i) if any such holder of Dissenting Landmark Common Shares or Dissenting Standard Common Shares
shall have failed to establish such holder’s entitlement to appraisal rights as provided in Section
262 of the DGCL, or (ii) if any such holder of Dissenting Landmark Common Shares or Dissenting
Standard Common Shares shall have effectively withdrawn such holder’s demand for appraisal of such
shares or lost such holder’s right to appraisal and payment for such holder’s shares under Section
262 of the DGCL, such holder shall forfeit the right to appraisal of such shares and each such
share shall not constitute a Dissenting Landmark Common Share or a Dissenting Standard Common
Share, as applicable, and shall be treated as if it had been converted, as of the Effective Time of
the Mergers, into a right to receive from the Landmark Surviving Corporation or the Standard
Surviving Corporation, as applicable, the portion of the Landmark Merger Consideration or the
Standard Merger Consideration, as applicable, deliverable in respect thereof as determined in
accordance with this Article II, without any interest thereon.
2.9 Withholding Rights. Notwithstanding anything to the contrary contained in this Agreement,
each of Acquiror, the Landmark Surviving Corporation, the Standard Surviving Corporation, and the
Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable to
any holder of Landmark Vested Options or Standard Vested Options immediately prior to the Effective
Time of the Mergers pursuant to this Article II such amounts as it is required to deduct and
withhold with respect to the making of such payment under any applicable provision of Federal,
state, local or foreign laws relating to Taxes, including any withholding from any payment that is
treated as wages or compensation for the performance of services. To the extent that amounts are
so withheld and promptly paid over to the applicable Governmental Authority to which such withheld
amounts are required to be paid, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Person in respect of which such deduction and withholding was
made.
2.10 Calculation of Landmark Merger Consideration and Standard Merger Consideration. On each of (i) a date that is not less than ten (10) Business Days and (ii) a date that is not
less than three (3) Business Days prior to the Closing Date, each of the Companies shall deliver to
Acquiror a statement containing such Company’s estimation of each of the Landmark Merger
Consideration, the Standard Merger Consideration and the Holder Allocable Expenses, together with
all detail supporting the calculation thereof reasonably requested by Acquiror. Acquiror shall not
less than two (2) Business Days prior to the Closing Date prepare and deliver to the Holder
Representative a draft flow of funds statement showing payments to be made under this Agreement
based upon the information provided by the Companies. Immediately following the close of business
on the Business Day immediately prior to the Closing Date, each of the Companies shall deliver to
Acquiror the final calculation of the Landmark Merger Consideration and the Standard Merger
Consideration, together with all detail
23
supporting the calculation thereof reasonably requested by Acquiror and the Holder Allocable Expense Payment Schedule. Promptly thereafter, Acquiror shall
finalize such flow of funds statement and deliver such final statement to the Holder Representative
for its consent (such consent not to be unreasonably withheld, delayed or denied).
2.11
***
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***
25
***
26
***
27
***
28
***
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANIES
REPRESENTATIONS AND WARRANTIES OF THE COMPANIES
Each of Landmark and Standard Aero hereby represents and warrants to Acquiror as follows:
3.1 Corporate Organization of the Companies. Each Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
29
of Delaware and has the corporate power and authority to own or lease its properties and to conduct its business as it
is now being conducted by such Company. The copies of the Certificate of Incorporation and Bylaws
of each Company previously made available by such Company to Acquiror are true, correct and
complete. Each Company is duly licensed or qualified and in good standing as a foreign corporation
in each jurisdiction in which the ownership of its property or the character of its activities is
such as to require it to be so licensed or qualified, except where the failure to be so licensed or
qualified would not have a Material Adverse Effect on the Combined Companies.
3.2 Subsidiaries. The Subsidiaries of each Company are set forth on Schedule 3.2
attached hereto. Such Subsidiaries have been duly formed or organized and are validly existing and
in good standing (to the extent the state of incorporation or organization of such Subsidiary
recognizes such concept) under the laws of their state of incorporation or organization and have
the power and authority to own or lease their properties and to conduct their business as it is now
being conducted. Each Company has previously provided to Acquiror copies of the organizational
documents of its Subsidiaries. Such copies are true, correct and complete. Each Subsidiary of
each Company is duly licensed or qualified and in good standing as a foreign corporation (or other
entity, if applicable) in each jurisdiction in which each such Subsidiary’s ownership of property
or the character of its activities is such as to require it to be so licensed or qualified, except
where the failure to be so licensed or qualified would not have a Material Adverse Effect on the
Combined Companies. Except for the Subsidiaries set forth on Schedule 3.2, neither Company owns
any equity interest in any Person, other than the investments made in the ordinary course of
business consistent with past practice in equity securities which are listed on a national
securities exchange or quoted on an automated quotation system.
3.3 Due Authorization.
(a) Each of the Companies has all requisite corporate power and authority to execute and
deliver this Agreement and (subject to the approvals discussed below) to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized and approved by the Board of Directors of each of the Companies, and no
other corporate proceeding on the part of such party is necessary to authorize this Agreement.
This Agreement has been duly and validly executed and delivered by each of the Companies, and
constitutes a legal, valid and binding obligation of such party, enforceable against such party in
accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights generally and subject, as
to enforceability, to general principles of equity.
(b) The Board of Directors of each Company, at a meeting duly called and held prior to the
execution of this Agreement, duly and unanimously adopted resolutions (i) approving and declaring
advisable this Agreement and the transactions contemplated hereby (such approvals having been made
in accordance with the DGCL, including for purposes of Section 203 thereof), (ii) determining that
the Landmark Merger or the Standard Merger, as the case may be, is advisable, fair to and in the
best interests of such Company and the stockholders of such Company, (iii) recommending that the
stockholders of such Company approve the Landmark Merger or the Standard Merger, as the case may
be, and (iv) adopting this Agreement,
30
which resolutions have not been modified, supplemented or
rescinded and remain in full force and effect.
(c) The affirmative vote of the holders of a majority of the shares of each Company
outstanding on the record date of such vote is the only vote of the holders of any class or series
of the capital stock of such Company necessary (under applicable law or otherwise) to approve this
Agreement and the Mergers (the “Required Stockholder Vote”). Concurrently with the
execution and delivery of this Agreement (and deemed to occur immediately following such execution
and delivery), the holders of Landmark Common Stock who hold, in the aggregate, a number of shares
of Landmark Common Stock entitled to cast votes in excess of the Required Stockholder Vote
applicable to Landmark, including Carlyle Landmark as the holder of 490,579 shares of Class A
Common Stock of Landmark (which constitutes all of the issued and outstanding shares of such Class
A Common Stock), executed and delivered to Landmark a written consent of the stockholders of
Landmark in lieu of a meeting thereof in accordance with Section 228 of the DGCL approving and
adopting this Agreement and the transactions contemplated hereby relating to the Landmark Merger in
accordance with the DGCL, including Section 251 thereof (the “Landmark Stockholder Written
Consent”), and such Landmark Stockholder Written Consent has not been modified, supplemented or
rescinded and remains in full force and effect. Concurrently with the execution and delivery of
this Agreement (and deemed to occur immediately following such execution and delivery), the holders
of Standard Common Stock who hold, in the aggregate, a number of shares of Standard Common Stock
entitled to cast votes in excess of the Required Stockholder Vote applicable to Standard Aero,
including Carlyle Standard as the holder of 2,024,452 shares of Standard Common Stock, executed and
delivered to Standard Aero a written consent of the stockholders of Standard Aero in lieu of a
meeting thereof in accordance with Section 228 of the DGCL approving and adopting this Agreement
and the transactions contemplated hereby relating to the Standard Merger in accordance with the
DGCL, including Section 251 thereof (the “Standard Stockholder Written Consent”), and such
Standard Stockholder Written Consent has not been modified, supplemented or rescinded and remains
in full force and effect. The holders of Landmark Common Stock party to the Landmark Stockholder
Written Consent, and the holders of Standard Common Stock party to the Standard Stockholder Written
Consent, in each case, collectively own a number of shares
sufficient to satisfy the Required Stockholder Vote applicable to Landmark or Standard Aero,
as the case may be.
3.4 No Conflict.
Except as set forth in Schedule 3.4, the execution and delivery of this Agreement by
each Company and the consummation of the transactions contemplated hereby and the performance by
each Company of each of its obligations hereunder, (a) does not and will not violate in any
material respect any provision of, or result in the material breach of, any applicable law, rule or
regulation of any Governmental Authority or any order, judgment or decree applicable to such
Company or any of its Subsidiaries, (b) violate or conflict with the certificate of incorporation,
bylaws or other organizational documents of such Company or any of its Subsidiaries or (c) result
in a material breach of, or constitute a material default (or event which, with the giving of
notice or lapse of time, or both, would become a default) under, or give to any Person any rights
of termination, amendment, acceleration or cancellation of, or result in the creation of any Lien
on any of the Assets, or require a consent or waiver under, or result in the
31
imposition or payment of any penalty, in each case pursuant to (i) any Material Contract, (ii) any material License, or
(iii) any note, bond, mortgage, indenture or other Indebtedness, except in the case of clauses
(c)(i) and (c)(ii), for Permitted Liens.
3.5 Governmental Authorities; Consents. Assuming the truth and completeness of the
representations and warranties of Acquiror contained in this Agreement, no consent, waiver,
approval, license, registration, order, permit or authorization of, or designation, declaration or
filing with, any Governmental Authority is required on the part of each of the Companies with
respect to such party’s execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) applicable requirements of the HSR Act, the
Competition Act or any similar foreign law; (ii) the approval of this Agreement and the
transactions contemplated hereby by the stockholders of the Companies in accordance with the DGCL;
(iii) the CFIUS Approval; (iv) the novations, consents or approvals required in connection with any
Contract with a Governmental Authority; and (v) as otherwise disclosed in Schedule 3.5 or
in connection with any License set forth in Schedule 3.19.
3.6 Capitalization of the Companies.
(a) The authorized capital stock of Landmark consists of 700,000 shares of Class A Common
Stock of Landmark, of which 490,579 are issued and outstanding as of the date of this Agreement,
1,300,000 shares of Class B Common Stock of Landmark, of which 469,751 are issued and outstanding
as of the date of this Agreement, and 100,000 shares of Preferred Stock of Landmark, none of which
are issued and outstanding. All of the issued and outstanding shares of Landmark Common Stock (i)
have been duly authorized and validly issued and are fully paid and nonassessable and (ii) were not
issued or acquired by the holders thereof in violation of any applicable law, agreement or the
preemptive rights or other similar rights of any Person. Except for the options to purchase
Landmark Common Shares held by the persons set
forth on Schedule 3.6(a), Landmark has not granted any outstanding options, warrants,
rights, call, “phantom” stock right, stock appreciation right or similar right or other securities
convertible into or exchangeable or exercisable for shares of the Landmark Common Stock or other
voting securities or equity interests, any other commitments or agreements providing for the
issuance of additional shares or other voting securities or equity interests, the sale of treasury
shares, or for the repurchase or redemption of shares of Landmark Common Stock or other voting
securities or equity interests, and there are no agreements of any kind which may obligate Landmark
to issue, purchase, redeem or otherwise acquire any of its capital stock or other voting securities
or equity interests or to issue, grant, extend or enter into any such option, warrant, right, call,
security, commitment, contract, arrangement or undertaking. Except as set forth on Schedule
3.6(a), no shares of capital stock or other equity interests of Landmark are reserved for
issuance or are held as treasury shares. Except for the options to purchase Landmark Common Shares
held by the persons set forth on Schedule 3.6(a), neither Landmark, nor any of its
Subsidiaries, has outstanding bonds, debentures, notes or other obligations, the holders of which
have the right to vote with the holders of the Landmark Common Stock on any matter.
(b) The authorized capital stock of Standard Aero consists of 5,000,000 shares of Standard
Common Stock, of which 2,185,895 are issued and outstanding as of the date of this Agreement. All
of the issued and outstanding shares of Standard Common Stock (i) have been duly authorized and
validly issued and are fully paid and nonassessable and (ii) were not issued
32
or acquired by the holders thereof in violation of any applicable law, agreement or the preemptive rights or other
similar rights of any Person. Except for the options to purchase Standard Common Shares held by
the persons set forth on Schedule 3.6(b), Standard Aero has not granted any outstanding
options, warrants, rights, call, “phantom” stock right, stock appreciation right or similar right
or other securities convertible into or exchangeable or exercisable for shares of the Standard
Common Stock or other voting securities or equity interests, any other commitments or agreements
providing for the issuance of additional shares or other voting securities or equity interests, the
sale of treasury shares, or for the repurchase or redemption of shares of Standard Common Stock or
other voting securities or equity interests, and there are no agreements of any kind which may
obligate Standard Aero to issue, purchase, redeem or otherwise acquire any of its capital stock or
other voting securities or equity interests or to issue, grant, extend or enter into any such
option, warrant, right, call, security, commitment, contract arrangement or undertaking. Except as
set forth on Schedule 3.6(b), no shares of capital stock or other equity interests of
Standard Aero are reserved for issuance or are held as treasury shares. Except for the options to
purchase Standard Common Shares held by the persons set forth on Schedule 3.6(b), neither
Standard Aero, nor any of its Subsidiaries, has outstanding bonds, debentures, notes or other
obligations, the holders of which have the right to vote with the holders of the Standard Common
Stock on any matter.
3.7 Capitalization of Subsidiaries of the Companies. The outstanding shares of capital stock
of each Subsidiary of each Company have been duly authorized and validly issued and are fully paid
and nonassessable. Landmark or one or more of its wholly-owned Subsidiaries own of record and
beneficially all the issued and outstanding shares of capital stock of its Subsidiaries, and
Standard Aero or one or more of its wholly-owned Subsidiaries own of record and beneficially all of
the issued and outstanding shares of capital stock of its Subsidiaries, in each case free and clear
of any Liens other than Permitted Liens. There are no outstanding options, warrants, rights, call, “phantom” stock right, stock appreciation
right or similar right or other securities convertible into or exchangeable or exercisable for
shares of any such Subsidiary or other voting securities or equity interests, any other commitments
or agreements providing for the issuance of additional shares or other voting securities or equity
interests, the sale of treasury shares, or for the repurchase or redemption of shares of such
Subsidiary or other voting securities or equity interests, and there are no agreements of any kind
which may obligate such Subsidiary to issue, purchase, redeem or otherwise acquire any of its
capital stock or other voting securities or equity interests or to issue, grant, extend or enter
into any such option, warrant, right, call, security, commitment, contract arrangement or
undertaking. Except as set forth on Schedule 3.7, no shares of capital stock or other equity
interests of such Subsidiary are reserved for issuance or are held as treasury shares.
3.8 Financial Statements.
(a) Landmark. Attached as Schedule 3.8(a) hereto are the audited consolidated
balance sheets of Landmark and its consolidated Subsidiaries as of December 31, 2006 and December
31, 2005, and the related consolidated statements of income, cash flow and stockholders’ equity for
the years then ended together with the auditor’s reports thereon (the “Landmark Financial
Statements”). Each of the Landmark Financial Statements has been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby (except as otherwise
stated in the footnotes or the audit opinion related thereto), and
33
presents fairly, in all material
respects, the consolidated financial position and results of operations of Landmark and its
consolidated Subsidiaries at and as of the dates stated in such Landmark Financial Statements.
(b) Standard Aero.
(i) Except as set forth on Schedule 3.8(b)(i), Standard Aero Holdings,
Inc. has timely filed or furnished all forms, reports and other documents required
to be filed or furnished by it with the SEC since January 1, 2006 (collectively, the
“Standard Reports”). As of their respective dates (or, if amended,
supplemented or superseded by a filing prior to the date of this Agreement, as of
the date so amended, supplemented or superseded), the Standard Reports (x) complied
in all material respects with the applicable requirements of the Securities Act, the
Exchange Act, and the rules and regulations thereunder, and (y) did not contain any
untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. Each of the consolidated
balance sheets included in the Standard Reports (including the related notes and
schedules) fairly presented in all material respects the consolidated financial
position of the Standard Aero Holdings, Inc. and its Subsidiaries as of the
respective dates thereof and each of the consolidated statements of operations, cash
flows and stockholders’ equity included in the Standard Reports (including any
related notes and schedules) fairly presents in all material respects the results of
operations, cash flows or changes in stockholders’
equity, as the case may be, of Standard Aero Holdings, Inc. and its
Subsidiaries for the periods set forth therein, in each case in accordance with GAAP
consistently applied during the periods involved, except as may be indicated in the
notes thereto and, in the case of unaudited statements, as permitted by Form 10 Q of
the SEC and the requirements of Regulation S-X under the Securities Act. The
principal executive officer of Standard Aero Holdings, Inc. and the principal
financial officer of Standard Aero Holdings, Inc. have made the certifications
required by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act of 2002 (the
“Xxxxxxxx-Xxxxx Act”), and the rules and regulations of the SEC promulgated
thereunder with respect to the Standard Reports that were required to be accompanied
by such certifications. For purposes of the preceding sentence, “principal
executive officer” and “principal financial officer” shall have the meanings given
to such terms in the Xxxxxxxx-Xxxxx Act.
(ii) Except as disclosed in the Standard Reports, Standard Aero Holdings, Inc.
maintains disclosure controls and procedures and internal controls over financial
reporting required by Rule 13a-15 or 15d-15 under the Exchange Act. Such controls
and procedures are designed to provide reasonable assurance that all material
information concerning Standard Aero Holdings, Inc. and its Subsidiaries required to
be disclosed by Standard Aero Holdings, Inc. in the Standard Reports is made known
on a timely basis to the individuals responsible for the preparation of the Standard
Aero Holdings, Inc.’s filings with the SEC and other public disclosure documents
and, except as disclosed in the Standard
34
Reports, such internal controls over
financial reporting are effective to provide reasonable assurance to Standard Aero
Holdings, Inc.’s management and Board of Directors regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP.
3.9 Undisclosed Liabilities.
(a) Except as set forth in Schedule 3.9(a), there is no material liability, debt or
obligation of or claim against either Company or any of their respective Subsidiaries of a type
normally reflected or reserved for on a balance sheet prepared in accordance with GAAP or disclosed
in the notes thereto, except for liabilities and obligations (i) (x) in the case of Landmark and
its Subsidiaries, reflected or reserved for on the Landmark Financial Statements or disclosed in
the notes thereto or (y) in the case of Standard Aero and its Subsidiaries, reflected or reserved
against for on the financial statements included in the Standard Reports or disclosed in the notes
thereto, (ii) that have arisen since December 31, 2006 in the ordinary course of the operation of
business of each of the Companies and its Subsidiaries, or (iii) disclosed in the Schedules hereto.
Neither the Companies nor any of their respective Subsidiaries is a party to, or has any
commitment to become a party to, any material “off-balance sheet arrangements” (as defined in Item
303(a) of Regulation S-K of the SEC).
(b) Except for all of the issued and outstanding capital stock of Standard Aero Holdings,
Inc., Standard Aero has no assets. Except for the obligation to deliver Standard
Common Stock upon the exercise of options to purchase Standard Common Stock set forth on
Schedule 3.6(b) and for such other Contracts set forth on Schedule 3.9(b), Standard
Aero has no liabilities of any nature, whether matured or unmatured, fixed or contingent and
whether or not required to be accrued on a balance sheet prepared in accordance with GAAP.
Landmark Aviation, Inc. shall be deemed a Subsidiary of Landmark for all purposes hereunder.
Landmark Aviation, Inc. has no assets and no liabilities of any nature, whether matured or
unmatured, fixed or contingent and whether or not required to be accrued on a balance sheet
prepared in accordance with GAAP other than (i) liabilities arising under Contracts disclosed on
Schedule 3.13(a) or which are not Material Contracts but which relate to the business of Landmark
and were entered into in the ordinary course of business and (ii) which are reflected in the
Landmark Financial Statements.
3.10 Absence of Certain Changes. During the period from December 31, 2006 through the date
hereof, (i) each Company and its respective Subsidiaries have conducted their respective businesses
only in, and have not engaged in any transaction other than according to, the ordinary and usual
course of such businesses consistent with past practice (except for the engagement of financial and
other advisors in connection with the pursuit of a sale transaction and the taking of other
customary actions in connection with the pursuit of such transaction including entering into
customary confidentiality agreements with potential purchasers of such Company, conducting due
diligence and allowing due diligence to be conducted on it (including making available otherwise
proprietary or confidential information) and meeting with potential financing sources)) and (ii)
except as set forth in Schedule 3.10 or as otherwise expressly contemplated by this
Agreement, there has not been:
35
(a) any Material Adverse Effect or any change, event, occurrence or development which would
reasonably be expected to have a Material Adverse Effect;
(b) any amendment to the Certificate of Incorporation, Bylaws or other organizational
documents of either Company or any of their respective Subsidiaries, except as otherwise required
by law;
(c) (i) except as otherwise required by law, existing Employee Plans or consistent with past
practice, any action with respect to the grant of any severance, termination pay or transaction
bonuses (other than (x) pursuant to policies or agreements of such Company or any of its
Subsidiaries in effect on the date of this Agreement or (y) transaction bonuses to senior
executives of the Companies, the aggregate amount of which shall not exceed $5,000,000, which
bonuses, if any, will be paid at the Closing as a Holder Allocable Expense) which will become due
and payable on or after the Closing Date and none of which shall fail to be deductible by reason of
Section 280G of the Code; (ii) any material change in the key management structure of such Company
or any of its Subsidiaries, including, without limitation, the hiring of additional officers or the
termination of existing officers, other than in the ordinary course of business; (iii) except in
the ordinary course of business or as otherwise required by law, adoption, entry into or material
amendment to any Employee Plan or any increase in the compensation or benefits payable or to become
payable to its directors or executive officers; or (v) any increase in the compensation or benefits
payable or to become payable to its other
employees or its consultants (in each case, except for increases in the ordinary course of
business substantially in accordance with past practices and methodologies);
(d) any sale, assignment, transfer, conveyance, lease, mortgage, pledge or other disposition
of any material Assets or properties of the Companies or their respective Subsidiaries other than
sales of inventory or obsolete Assets in the ordinary course of business consistent with past
practice;
(e) any cancellation of any Indebtedness or waiver of any claims or rights of material value
(including, without limitation, any account receivable or trade account involving an amount in
excess of $1,000,000) with respect to the Companies, their respective Subsidiaries or the
businesses conducted by any of them, other than in the ordinary course of business consistent with
past practice;
(f) any entry into, cancellation, termination, renewal or material amendment of any Material
Contract (including any submission or issuance of a Loss Bid) or material License issued to either
Company or their respective Subsidiaries, except in the ordinary course of business consistent with
past practice;
(g) any capital expenditure or incurrence of liability therefor by either Company or their
respective Subsidiaries, other than capital expenditures consistent with the applicable Company’s
capital expenditure budget a copy of which has been provided to Acquiror prior to the date hereof
or such other capital expenditures that do not exceed $2,000,000 individually or $5,000,000 in the
aggregate;
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(h) any revaluation by either Company or any of their respective Subsidiaries or, with respect
to the businesses of the Companies and their respective Subsidiaries, as applicable, of any Assets
or any assets of the businesses or properties of the Companies, including writing off notes or
accounts receivable or reserves or revaluing inventory, other than as required by GAAP, applied
consistently with past practice, or applicable law;
(i) any damage, destruction or loss (whether or not covered by insurance) materially and
adversely affecting any of the material assets or properties of the Companies;
(j) any Indebtedness incurred, assumed or guaranteed by either Company or their respective
Subsidiaries for borrowed money or any commitment to incur, assume or guarantee Indebtedness
entered into by either Company or their respective Subsidiaries, or any loans made or agreed to be
made by either Company or their respective Subsidiaries (other than advances or loans to
employees), in each case other than in the ordinary course of business consistent with past
practice;
(k) any declaration, setting aside for payment or payment of dividends or distributions in
respect of any capital stock, or any redemption, purchase or other acquisition by either Company of
any capital stock of either Company;
(l) any amendment of any term of any class or series of outstanding securities of either
Company or any of their respective Subsidiaries;
(m) any charitable contribution made or pledged by or on behalf of either Company or any of
their respective Subsidiaries, other than charitable contributions made or pledged that do not,
individually or in the aggregate, exceed $100,000;
(n) any “plant closing” or “mass layoff” as defined by the Worker Adjustment and Retraining
Notification Act of 1988 or any similar applicable foreign, state or local law requiring notice to
employees in the event of a closing or layoff (the “WARN Act”) without complying, in all material
respects, with the WARN Act;
(o) any Lien created, otherwise incurred or otherwise suffered on any material Asset of either
Company or any of their respective Subsidiaries, other than Permitted Liens;
(p) any merger or consolidation with or purchase of substantially all of the assets of, or
other acquisition of the material assets or material business of any corporation, partnership,
association, joint venture or other business organization or division thereof, except for Permitted
Acquisitions;
(q) any change in any accounting or financial reporting methods of the Companies or any of
their respective Subsidiaries or any material Tax election, except as required by GAAP or
applicable law, entry into any Tax allocation agreement, Tax sharing agreement, Tax indemnity
agreement or closing agreement, in each case involving a material amount of Taxes, settlement or
compromise of any claim, notice, audit report or assessment in respect of Taxes, or any consent to
any extension or waiver of the limitation period applicable to any claim or assessment in respect
of Taxes;
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(r) any settlement of, or offer to settle, any Action involving either Company or their
respective Subsidiaries pursuant to which such Company or Subsidiary paid, or agreed to pay, an
amount equal to or greater than $250,000; or
(s) any commitment or agreement by either Company or any of their respective Subsidiaries to
do any of the foregoing.
3.11 Litigation and Proceedings. Except as set forth on Schedule 3.11, there are no
civil, criminal or administrative lawsuits, actions, suits, claims, hearings or other proceedings
at law or in equity, or to the knowledge of each Company, investigations, before or by any court or
arbitrator or any Governmental Authority pending or, to the knowledge of each Company, threatened,
against such Company or any of its Subsidiaries, in each case seeking damages or fines in excess of
$250,000 individually or injunctive relief. Except as set forth on Schedule 3.11, there is
no unsatisfied judgment or Governmental Order requiring payment in excess of $250,000 or any open
injunction binding upon either Company or any of their respective Subsidiaries.
3.12 Legal Compliance. Except with respect to (i) matters set forth on Schedule 3.12,
and (ii) compliance with Environmental Laws and judgments, orders, injunction, decrees,
determinations, arbitration
awards and investigations related thereto (as to which certain representations and warranties are
made pursuant to Section 3.23):
(a) each Company and its respective Subsidiaries are in compliance in all material respects
with all laws (including rules and regulations thereunder), judgments, orders, injunction, decrees,
determination or arbitration award of any Governmental Authority applicable thereto;
(b) since January 1, 2004, none of the Companies nor any of their respective Affiliates has
received notice to the effect that either Company is not in compliance in all material respects
with all laws (including rules and regulations thereunder), judgments, orders, injunction, decrees,
determination or arbitration award of any Governmental Authority applicable thereto; and
(c) since January 1, 2004, none of the Companies nor any of their respective Affiliates have
received notice of any investigation by any Governmental Authority with respect to either Company
or any of their respective Subsidiaries, and, to the knowledge of each Company, no investigation is
threatened and no condition exists that would reasonably be expected to prompt such an
investigation.
3.13 Contracts; No Defaults.
(a) Schedule 3.13(a) contains a listing of all Contracts (other than Government
Contracts as to which certain representations are made in Section 3.27 of this Agreement) described
in clauses (i) through (x) below to which, as of the date of this Agreement, a Company or any of
its Subsidiaries is a party or by which either Company or any of their respective Subsidiaries or
assets are bound (collectively, the “Material Contracts”). True, correct and complete
copies of the Material Contracts have been delivered to or made available to Acquiror or its agents
or representatives.
38
(i) Each Contract that involves performance of services, or delivery of goods and/or materials by or for either Company or any of their respective Subsidiaries of an amount or value in excess of $25,000,000 in any calendar year;
(ii) Each Contract that involves the purchase of services or goods and/or materials by the Companies or any of their respective Subsidiaries of an amount or value in excess of $25,000,000 in any calendar year;
(iii) Each note, debenture, other evidence of indebtedness, guarantee, loan, credit or financing agreement or instrument or other contract for money borrowed, including any agreement or commitment for future loans, credit or financing;
(iv) Each Contract for the acquisition of any Person or any business unit thereof or the disposition of any material assets of either Company or any of their respective Subsidiaries (other than in the ordinary course of business consistent with past practice), in each case (x) involving payments in excess of $25,000,000 or (y) which provides for any earn-out
or other similar payment of contingent purchase price that has not been paid prior to the date hereof;
(v) Each lease, rental or occupancy agreement, license, installment and conditional sale agreement, and other Contract affecting the ownership of, leasing of, title to, use of, or any leasehold or other interest in any real or personal property and involving aggregate payments in excess of $10,000,000 in any calendar year;
(vi) Each licensing agreement with respect to material Intellectual Property or any agreement restricting the rights of the Companies or any of their respective Subsidiaries, or permitting any Person, to use or register any material Intellectual Property;
(vii) Each joint venture Contract, partnership agreement, limited liability company agreement or any similar agreement or arrangement, including, without limitation, any agreements or arrangements evidencing a minority investment in or a capital call obligation to any corporation, partnership, joint venture or other entity or enterprise;
(viii) Any noncompetition or similar agreement restricting the business or activities of either Company or any of their respective Subsidiaries anywhere in the world (including without limitation any restriction on operating in any line of business or in any geographic area);
(ix) Each Contract requiring capital expenditures after the date of this Agreement in an amount in excess of $2,000,000 in any calendar year; and
(x) Any certification from an original equipment manufacturer pursuant to which a Company reasonably expects to conduct more than $25,000,000 of business in 2007.
39
(b) Except as set forth on Schedule 3.13(b), all the Material Contracts listed
on Schedule 3.13(a) are as of the date hereof and will be immediately prior to the Closing
(except to the extent such Contracts expire prior to the Closing at their scheduled expiration date
in accordance with their terms) (i) in full force and effect and (ii) represent the legal, valid
and binding obligations of a Company or one of its Subsidiaries party thereto and, to the knowledge
of the applicable Company, represent the legal, valid and binding obligations of the other parties
thereto. Except as set forth on Schedule 3.13(b), neither Company nor any of their
respective Subsidiaries party thereto nor, to the knowledge of each Company, any other party
thereto is in material breach of or material default under any such Material Contract. Except as
set forth on Schedule 3.13(b), to the knowledge of each Company, no condition or event
exists or has occurred which, with notice or lapse of time or both, would, as of the date of this
Agreement or immediately prior to the Closing, constitute a material default or a basis for force
majeure under any Material Contract, and neither Company nor any of their respective Subsidiaries
has received written or, to the knowledge of such Company, oral notice from any other Person
claiming or threatening to claim such a condition or event exists or has occurred.
3.14 Employee Benefit Plans.
(a) Definitions. The following terms, when used in this Agreement, shall have the
following meanings. Any of these terms may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
(i) “Employee Plans” shall mean any employment, consulting, severance
or other similar contract, arrangement or policy and each plan, arrangement,
program, agreement or commitment providing for insurance coverage (including without
limitation any self-insured arrangements), workers’ compensation, disability
benefits, supplemental unemployment benefits, vacation benefits, retirement
benefits, life, health, disability or accident benefits (including without
limitation any “voluntary employees’ beneficiary association” as defined in Section
501(c)(9) of the Code providing for the same or other benefits), deferred
compensation, profit-sharing bonuses, stock options, stock appreciation rights,
stock purchases, incentive compensation, post-retirement insurance, compensation or
benefits, severance or termination pay, change in control benefits, retention
benefits, death benefits, loans, or any other similar plan, arrangement, agreement
or understanding, including, without limitation, each “employee benefit plan” (or
similar plan) within the meaning of Section 3(3) of ERISA or any other applicable
law, whether or not subject to ERISA (as defined in Section 3.13(a)(ii)) or such
comparable applicable law, which are maintained, contributed to, or required to be
contributed to, by either Company, any of their respective Subsidiaries or ERISA
Affiliates with respect to which either Company or any of their respective
Subsidiaries has, or are reasonably anticipated to have, any liability or
obligation.
(ii) “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended.
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(iii) “ERISA Affiliate” shall mean any of the Combined Companies’
Subsidiaries or any trade or business, whether or not incorporated, that together
with the Combined Companies or any of their respective Subsidiaries would be deemed
a “single employer” within the meaning of section 4001 of ERISA.
(iv) “Multiemployer Plan” shall mean any “multiemployer plan” as
defined in Section 4001(a)(3) of ERISA, which either Company or any of their
respective Subsidiaries or ERISA Affiliates contributes to, or has an obligation to
contribute to, which covers any current or former employee of either Company or any
of their respective Subsidiaries or with respect to which either Company or any of
their respective Subsidiaries has, or are reasonably anticipated to have, any
liability.
(v) “Pension Plan” shall mean any “employee pension benefit plan” as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) which either
Company or any of their respective Subsidiaries or ERISA Affiliates sponsors,
maintains, administers, contributes to, or is obligated to contribute to, which
covers any current or former employee of either Company or any of their respective
Subsidiaries or with respect to which either Company or any of their respective
Subsidiaries has, or are reasonably anticipated to have, any liability.
(b) Disclosure. Schedule 3.14(b) contains a list of each Employee Plan in
effect on the date of this Agreement, except for oral or written employment agreements or severance
agreements with respect to any current or former employee.
(c) Representations. Except as set forth in Schedule 3.14(c), the Companies
represent and warrant the following:
(i) Neither Company nor any of their Subsidiaries has any current or potential
liability under Title IV of ERISA with respect to any Pension Plan.
(ii) Each Employee Plan has been, in all material respects, administered and
operated in accordance with its terms, with the applicable provisions of ERISA, the
Code and other applicable laws and with the terms of the applicable collective
bargaining agreements. Except as would not reasonably be expected to result in
material liability to any of the Combined Companies, each Employee Plan, including
any material amendments thereto, that is required to obtain approval by or
registration or qualification for special tax status with, the appropriate taxation,
social security or supervisory authorities in the relevant country, state,
territory, or the like (each, an “Approval”) has received such Approval (or
there remains a period of time in which to obtain such Approval restoratively to the
date of any material amendment that has not previously received such Approval), and
no event has occurred which would reasonably be expected to result in the revocation
of such Approval or the imposition of material
sanctions by such authorities. Without limiting the generality of the
foregoing, each Employee Plan which covers current or former employees of each
Company or any of their respective Subsidiaries that is intended to be qualified
within the
41
meaning of Section 401 of the Code has received a favorable determination
or opinion letter from the Internal Revenue Service regarding its tax-qualification
(and to the knowledge of each Company no event has occurred which, since the date of
such letter, would reasonably be expected to result in the revocation of such
determination letter).
(iii) Neither Company nor any of their Subsidiaries contributes to, has at any
time in the past six years contributed to, or is obligated to contribute to, any
Multiemployer Plan.
(iv) Fiduciary Duties and Prohibited Transactions. Neither Company nor
any of their Subsidiaries has any material liability with respect to any transaction
in violation of Sections 404 or 406 of ERISA or any “prohibited
transaction,” as defined in Section 4975(c)(1) of the Code, for which no
exemption exists under Section 408 of ERISA or Section 4975(c)(2) or (d) of the
Code. Neither Company nor any of their Subsidiaries has knowingly participated in a
violation of Part 4 of Title I, Subtitle B of ERISA by any plan fiduciary of any
Pension Plan. The Secretary of Labor has not assessed a civil penalty under Section
502(l) of ERISA that remains unpaid.
(v) No oral or written representation or commitment with respect to any
material aspect of any Employee Plan has been made to an employee or former employee
of either of the Companies or any of their respective Subsidiaries by an authorized
employee of either Company that is not in accordance with the written or otherwise
pre-existing terms and provisions of such Employee Plan and which is reasonably
anticipated to materially increase the Companies’ liability with respect to such
Employee Plan.
(vi) There are no material unresolved claims or disputes under the terms of, or
in connection with, any Employee Plan (other than routine undisputed claims for
benefits), and no action, legal or otherwise, has been commenced or, to the
knowledge of either Company, threatened with respect to any material claim.
(vii) No Employee Plan provides health benefit coverage beyond the end of the
month in which an employee’s termination occurs (whether or not insured) with
respect to employees or former employees of either Company or their respective
Subsidiaries after retirement or other termination of service (other than coverage
mandated by applicable laws or benefits, the full cost of which is borne by the
employee or former employee).
(viii) Neither the negotiation and execution of the Agreement nor the
consummation of the transaction contemplated hereby will (either alone or upon the
occurrence of any additional or subsequent events) constitute an event under any
Employee Plan that will or may result in any payment (whether of severance
pay or otherwise), acceleration of payment, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligation to fund benefits with
respect to any employee or former employee of either Company or their respective
Subsidiaries
42
or limit the ability to amend, terminate or receive a reversion of
assets from any Employee Plan or related trust. There is no contract, agreement,
plan or arrangement with an employee or former employee of either Company to which
either Company or their respective Subsidiaries is a party (including, without
limitation, the stock option plans and underlying agreements) that, individually or
collectively and as a result of the transactions contemplated hereby (whether alone
or upon the occurrence of any additional or subsequent events) would give rise to
the payment of any amount that would not be deductible pursuant to Section 280G of
the Code.
(ix) With respect to each Employee Plan established or maintained outside of
the United States for the benefit of employees of either Company or any of their
respective Subsidiaries residing outside the Untied States (each, a “Foreign
Plan”), and except as would not reasonably be expected to result in material
liability to any of the Combined Companies, the fair market value of the assets of
each funded Foreign Plan, the liability of each insurer for a Foreign Plan funded
through insurance or the book reserve established for any Foreign Plan, together
with any accrued contributions, is sufficient to procure or provide for the accrued
benefit obligations, as of the date hereof, with respect to all current and former
participants in such plan according to reasonable actuarial assumptions and
valuations and no transaction contemplated by this Agreement is reasonably
anticipated to cause such assets or insurance obligation to be, in any material
respects, less than such benefit obligations, and all material amounts required to
be accrued with respect to any Foreign Plan or pursuant to any statutory requirement
pertaining to employee benefits, mandatory contributions, retirement plans or
similar benefits, have been, in all material respects, properly and timely accrued,
including, in all material respects, accruals relating to any severance, termination
pay or profit sharing benefits..
(x) Neither Company, nor, to the knowledge of each Company, any other Person,
has any express commitment to modify, change or terminate any Employee Plan, other
than with respect to a modification, change or termination required by ERISA or the
Code, or any other applicable laws or administrative changes that do not materially
increase the liabilities or obligations under any such plans.
3.15 Labor Relations. Except as set forth in Schedule 3.15:
(a) Neither the Companies nor any of their Subsidiaries are party to, or bound by, any
collective bargaining agreement or labor agreement or arrangements with any labor union, labor
organization or works council and no employees of the Companies or their
Subsidiaries are represented by any labor organization with respect to their employment with
the Companies or their Subsidiaries.
(b) The Companies and their Subsidiaries are neither party to, nor bound by, any oral or
written employment agreement or severance agreement with respect to any current or former employee
whose compensation during the fiscal year ended December 31, 2006 exceeded
43
$250,000 and which may not be terminated at will, or terminated by giving notice of thirty (30) days or less, without cost
or penalty.
(c) Since January 1, 2004, there have been no material representation questions, material
arbitration proceedings, labor strikes, slow downs, stoppages, lockouts, grievances or other
material labor disputes, to the knowledge of each Company, pending or threatened with respect to
the employees of the Companies or their Subsidiaries.
(d) To the knowledge of each Company, (i) no labor union, labor organization, works council,
or group of employees of the Companies or their Subsidiaries has made a pending demand for
recognition or certification, and (ii) there are no representation or certification proceedings or
petitions seeking a representation proceeding presently pending or threatened in writing to be
brought or filed with the National Labor Relations Board or any other labor relations tribunal or
authority. As of the date hereof, the Companies have no knowledge of any current labor union
organizing activities with respect to any employees of the Companies or their Subsidiaries.
(e) The Companies and their Subsidiaries have complied in all material respects with all laws,
rules and regulations relating to employment, equal employment opportunity, affirmative action,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining, plant closings and
layoffs (the “Employment Laws”). Neither the Companies nor their Subsidiaries are liable
for the payment of material taxes, fines, penalties or other amounts, however designated, for
failure to comply with any of the foregoing Employment Laws.
(f) The Companies and their Subsidiaries are not: (i) a “contractor” or “subcontractor” (as
defined by Executive Order 11246), (ii) required to comply with Executive Order 11246 or (iii)
required to maintain an affirmative action plan.
(g) The execution of this Agreement and the consummation of the transactions contemplated by
this Agreement will not result in any material breach or other material violation of any collective
bargaining agreement or any other labor related agreement to which the Companies or their
Subsidiaries are a party.
3.16 Taxes. Except as otherwise disclosed in Schedule 3.16:
(a) Each of the Companies and their respective Subsidiaries have (i) prepared and duly and
timely filed all tax returns (collectively, “Tax Returns”) (or such Tax Returns have been
filed on behalf of the Companies and their Subsidiaries) required to be filed, taking into account
all extensions, and all such Tax Returns were accurate, correct and complete in all
material respects; (ii) paid all Taxes due and payable with respect to any Pre-Closing Period,
except for amounts being contested in good faith by appropriate proceedings and for which adequate
reserves have been established on the Companies’ financial statements in accordance with GAAP; and
(iii) withheld and remitted all material Taxes that the Companies or any of their respective
Subsidiaries are obligated to withhold from amounts owing to any employee, independent contractor,
creditor or other third party, except with respect to matters contested in good faith.
44
(b) No issues that have been raised or threatened in writing by the relevant taxing authority
in connection with the examination of any of the Tax Returns referred to in clause (a) of this
Section are currently pending, and all deficiencies asserted or assessments made, if any, as a
result of such examinations have been paid in full, unless the validity of the issues or amount of
the deficiencies or assessments are being contested in good faith by appropriate action. No
assessment, audit or other proceeding by any taxing authority, court or other Governmental
Authority is pending, or, to the knowledge of each Company, threatened with respect to the Taxes of
the Companies or any of their respective Subsidiaries.
(c) Since January 1, 2004, no claim has been made in writing to either Company or any of their
respective Subsidiaries by an authority in a jurisdiction where any of the Companies and their
Subsidiaries does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction with respect to any taxable year or period.
(d) There are no outstanding agreements, waivers or arrangements extending the statutory
period of limitations applicable to any claim for, or the period for, the collection or assessment
of, Taxes due for any taxable period.
(e) Neither the Companies nor their respective Subsidiaries has any liability for Taxes of any
other Person (other than the Companies or any of their Subsidiaries) under Treasury Regulations
Section 1.1502-6 (or any similar provision of state, local or foreign law) or as a transferee or
successor, by contract or otherwise.
(f) Neither the Companies nor any of their respective Subsidiaries will be required to include
any item of income in, or exclude any item of deduction from, taxable income for any taxable period
or portion thereof beginning after the Closing Date as a result of any closing agreement as
described in Section 7121 of the Code (or any corresponding or similar provision of state, local or
foreign law) executed on or prior to the Closing Date.
(g) Neither the Companies nor their respective Subsidiaries is a party to, is bound by, or has
any obligation under, any Tax sharing agreement, Tax indemnification agreement or similar contract
or arrangement, whether written or unwritten, other than an express obligation (x) in any customary
agreement with customers, vendors or lessors entered into in the ordinary course of business or (y)
with respect to any real property lease or credit agreement (collectively, “Tax Sharing
Agreements”).
(h) Neither the Companies nor any of their respective Subsidiaries has been a United States
real property holding corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(i) Neither the Companies nor any of their respective Subsidiaries are required to include any
amount in taxable income after Closing, as a result of transactions or events occurring prior to
the Closing pursuant to Section 481 or Section 453 of the Code or any comparable provision under
state or foreign law.
(j) Neither the Companies nor any of their respective Subsidiaries has participated in a
“listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b).
45
(k) There are no Liens on any Assets of the Companies or any of their respective Subsidiaries
that arose in connection with any failure (or alleged failure) to pay any Tax, except for Liens
being contested in good faith by appropriate proceeding.
(l) No power of attorney has been granted by or with respect to any of the Companies or any of
their respective Subsidiaries with respect to any matter relating to Taxes.
3.17 Brokers’ Fees. Except as included as a Holder Allocable Expense or otherwise set forth in
Schedule 3.17, no broker, finder, investment banker or other Person is entitled to any
brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by either Company, any of their respective Subsidiaries
or their respective Affiliates.
3.18 Insurance. Schedule 3.18 contains a summary description of all policies of
property, fire and casualty, product liability, workers’ compensation, and other forms of insurance
held by, or for the benefit of, each Company or any of their respective Subsidiaries. True,
correct and complete copies of such insurance policies have been made available to Acquiror.
Except as set forth on Schedule 3.18, (i) such insurance policies or similar predecessor
policies have been in effect since January 1, 2006, and there has been no gap in coverage during
this time period; (ii) there is no material claim by either Company or any their respective
Subsidiaries pending under any of the policies or binders as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or binders (other than standard reservation
of rights); and (iii) all premiums due and owing under all such policies have been timely paid when
due (or if paid late, paid without cancellation of coverage) and each Company and their respective
Subsidiaries have otherwise complied in all material respects with the terms and conditions of all
such policies. None of such insurance policies will terminate or lapse as a result of the Mergers
or the consummation of the other transactions contemplated by this Agreement.
3.19 Licenses, Permits and Authorizations. Schedule 3.19 contains a list of all
material Licenses which are held, as of the date of this Agreement, by each Company or any of their
respective Subsidiaries. Except as forth on Schedule 3.19, each such License is valid and
in full force and effect. Neither Company nor any of their respective Subsidiaries is in default
under any License set forth on Schedule 3.19 and there are no proceedings pending or, to
the knowledge of such Company, threatened that seek the
revocation, cancellation, suspension or adverse modification thereof. Such material Licenses
constitute all of the Licenses necessary to permit each Company and their respective Subsidiaries
to own, operate, use and maintain their assets in the manner in which they are now operated and
maintained and to conduct the business of each Company and their respective Subsidiaries in all
material respects as currently conducted.
3.20 Machinery, Equipment and Other Tangible Property. Except as set forth on Schedule
3.20, each Company or their respective Subsidiaries own and have good title to all material
tangible personal property, machinery and equipment reflected on the books of such Company and its
Subsidiaries as owned by such Company or its Subsidiaries, free and clear of all Liens other than
Permitted Liens.
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3.21 Real Property. Schedule 3.21(a) lists (i) all Owned Real Property and (ii) all
Leased Real Property. The Owned Real Property and the Leased Real Property is all of the material
real property used or held for use in, and reasonably required for, the conduct of the business of
each Company and their respective Subsidiaries as currently conducted. Except as set forth on
Schedule 3.21(b), a Company or one of its Subsidiaries has good and marketable fee simple
title to all Owned Real Property free and clear of any Liens, subject only to any Permitted Liens.
Except as set forth on Schedule 3.21(b), a Company or one of its Subsidiaries has a valid
and subsisting leasehold estate in, and enjoys peaceful and undisturbed possession of, all Leased
Real Property, subject only to any Permitted Liens. Except as set forth on Schedule
3.21(b), neither Company nor any of their respective Subsidiaries has leased, licensed, or
otherwise granted any Person the right to use or occupy the Owned Real Property or Leased Real
Property. Neither Company nor any of their respective Subsidiaries has received written notice of
any default or any event which, with notice or lapse of time or both, would constitute a default
under a lease of Leased Real Property.
3.22 Intellectual Property.
(a) Schedule 3.22(a) lists, as of the date hereof, each material (i) patent,
registered trademark, registered service xxxx or trade name, registered copyright or mask work,
registered domain name, and applications for any of the foregoing and (ii) OEM certifications and
supplemental type certificates, held by either Company or any of their respective Subsidiaries.
(b) Except as set forth on Schedule 3.22(b), (i) each Company and each of their
respective Subsidiaries has good title to each item of Intellectual Property owned by it, free and
clear of all Liens other than Permitted Liens, (ii) each Company and each of their respective
Subsidiaries owns or has the right to use pursuant to license, sublicense, agreement or permission,
all items of Intellectual Property used in the operation of the business of such Company and any of
its Subsidiaries, as currently conducted, (iii) the businesses as presently conducted by the
Companies’ and their Subsidiaries’ is not infringing upon or otherwise violating the rights in
Intellectual Property of any other Person in any material manner, and (iv) to the knowledge of the
Companies, no other Person is materially infringing upon, materially misappropriating or
otherwise materially violating the Intellectual Property of either Company and any of their
respective Subsidiaries.
3.23 Environmental Matters. Except as set forth in Schedule 3.23:
(a) Each Company and their respective Subsidiaries, including the methods and means employed
in the operation thereof, are in material compliance with all applicable Environmental Laws (which
compliance includes, but is not limited to, the possession by each Company and each of their
respective Subsidiaries of all material permits, registrations and licenses and other governmental
approvals required for the conduct of their business under applicable Environmental Laws
(collectively, “Environmental Permits”), and in material compliance with the terms and
conditions thereof. Neither Company nor any of their respective Subsidiaries has received any
written notice from a Person alleging that either Company or their respective Subsidiaries is not
in such compliance. All Environmental Permits currently held by
47
each Company and their respective Subsidiaries pursuant to Environmental Laws as of the date of this Agreement are set forth in
Schedule 3.23(a).
(b) As of the date of this Agreement there is no material Environmental Claim pending or, to
the knowledge of each Company and their respective Subsidiaries, threatened, against any of the
Companies or their respective Subsidiaries or, to the knowledge of each Company and their
respective Subsidiaries, against any Person whose liability for any Environmental Claim any Company
or Subsidiary has or may have retained or assumed either by Contract or by operation of Law.
(c) There are no present or, to the knowledge of the Companies, past actions, activities,
circumstances, conditions, events or incidents, including the Release, threatened Release or
presence of any Hazardous materials, that would reasonably be expected to result in an
Environmental Claim against any of the Companies or their respective Subsidiaries, or, to the
knowledge of each Company and their respective Subsidiaries against any Person whose liability for
any such Environmental Claim any of the Companies or their respective Subsidiaries has or may have
retained or assumed either by Contract or by operation of Law, the adverse determination of which
would reasonably be expected to have a Material Adverse Effect.
(d) None of the Companies or their respective Subsidiaries have, and to the knowledge of each
Company and their respective Subsidiaries, no other Person has placed, stored, deposited,
discharged, buried, dumped or disposed of Hazardous Materials or any other wastes produced by, or
resulting from, any business, commercial or industrial activities, operations or processes, on,
beneath or adjacent to any property currently or formerly owned, operated or leased by any of the
Companies or their respective Subsidiaries, or at any other location except, with respect to the
foregoing, (i) for inventories of such substances to be used, and wastes generated therefrom, in
the ordinary course of business consistent with past practice of the Companies or Subsidiaries,
which inventories and wastes, if any, were and are stored, deposited, discharged, buried, dumped or
disposed of in accordance with applicable Environmental Laws, or (ii) as would not reasonably be
expected to have a Material Adverse Effect.
(e) The Companies and their respective Subsidiaries have delivered or made available to
Acquiror complete, accurate and current copies of (i) any Phase 1 and Phase 2 reports in respect of
any owned or leased property of each Company and their respective Subsidiaries and (ii) to the
knowledge of the Companies, any other material studies, analyses, tests or monitoring, to the
extent such documents described in clauses (i) and (ii) above are in their possession or control
and were generated within the past seven (7) years.
(f) To the knowledge of each Company and their respective Subsidiaries, and except as would
not reasonably be expected to have a Material Adverse Effect, none of the Owned Real Property or
Leased Real Property contains any of the following in violation of Environmental Laws: underground
storage tanks; asbestos; polychlorinated biphenyls (PCBs); toxic mold; underground injection xxxxx;
dry xxxxx; radioactive materials; or septic tanks or waste disposal pits in which process
wastewater or any Hazardous Materials have been discharged or disposed.
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(g) No Cleanup is occurring on any Owned Real Property, or Leased Real Property, and no Person
has handled any Hazardous Materials or Released reportable quantities of any Hazardous Materials
from, on or under any Owned Real Property or Leased Real Property except (i) in material compliance
with applicable Environmental Laws, and (ii) in a manner that has not resulted in a Environmental
Claim or Cleanup, in either case not fully resolved in all material respects as of the date hereof.
(h) Neither the Companies nor any of their respective Subsidiaries as of the date of this
Agreement (i) is party to a Contract pursuant to which it is obligated to indemnify any other
Person with respect to, or be responsible for, any pending Environmental Claim or violations,
obligations or liabilities pursuant to or violation of Environmental Law, or (ii) has made any
pending claim with respect to any alleged liability arising under Environmental Laws pursuant to
any indemnity or other right vested in either Company, including but not limited to any
indemnification owed to the Companies or their respective Subsidiaries for Cleanup or with respect
to Hazardous Materials.
3.24 Customers and Suppliers
(a) Schedule 3.24(a) sets forth, for each Company, a list of the names of such
Company’s (i) ten (10) largest customers for the fiscal year ending December 31, 2006, showing the
aggregate total sales in dollars by such Company to such customer during such fiscal year; and (ii)
ten (10) largest suppliers for the fiscal year ending December 31, 2006 showing the approximate
aggregate total purchases in dollars by such Company from each such supplier during each such
fiscal year.
(b) As of the date of this Agreement, except as set forth on Schedule 3.24(b), neither
Company nor any of their respective Subsidiaries has received any written communication from any
customer or supplier named on Schedule 3.24(a) of any intention or threat to terminate or
materially reduce purchases from or supplies to such Company.
3.25 Affiliate Transactions. Except as set forth on Schedule 3.25, no officer, director or stockholder of either
Company or any of their respective Subsidiaries or, to the knowledge of each Company, any Person in
which any such Person owns a greater than 10% beneficial interest is a party to any agreement,
Contract, guarantee, commitment or transaction with either Company, any of their respective
Subsidiaries or any of their respective businesses or has a material interest in any material
property used or held for use by either Company, any of their respective Subsidiaries or any of
their respective businesses (any such agreement, Contract, commitment, transaction or interest, a
“Related Party Transaction”); provided, that “Related Party Transaction” shall not
include commercial arrangements between a Company or Subsidiary thereof, on the one hand, and a
portfolio company of the ultimate stockholder of a Company, on the other hand, to the extent
negotiated on an arms’ length basis and are on terms substantially similar to other similar
contracts between the applicable Company and a third party.
3.26 Business Relationships. To the knowledge of each Company, neither Company nor any of their
respective Subsidiaries has a customer or supplier relationship with, or is a party to any Contract
with any person or entity that is (i) on the U.S. Department of Treasury Office of Foreign Assets
Control (“OFAC”) list of specially designated nationals and blocked
49
persons (the “SDN List”); (ii) owned or controlled by or acting on behalf of a person or entity on the SDN List;
(iii) otherwise the target of economic sanctions administered by OFAC; or (iv) owned or controlled
by or acting on behalf of a person or entity that is otherwise the target of economic sanctions
administered by OFAC.
3.27 Government Contracts.
(a) Definitions. Schedule 3.27(a) is a true and complete list, as of the date
of this Agreement, of each Government Contract (as defined below) to which either Company or any of
their respective Subsidiaries is a party, by which either Company or any of their respective
Subsidiaries is bound, or which otherwise pertain to the business of each Company and their
respective Subsidiaries as currently conducted and which is reasonably expected to have a value in
excess of $5,000,000. The following capitalized terms, when used in this Section 3.27, shall have
the respective meanings set forth below:
(i) “Bid” means any bid, proposal, offer or quotation made by either Company or
any of their respective Subsidiaries, or by a contractor team or joint venture in
which either Company or any of their respective Subsidiaries is participating, that,
if accepted, would lead to a Government Prime Contract or a Government Subcontract.
(ii) “Government Contract” means any Government Prime Contract, Government
Subcontract, Bid or Teaming Agreement.
(iii) “Government Prime Contract” means any prime contract, blanket purchase
agreement, basic ordering agreement, letter contract, delivery order, task order or
purchase order on which final payment has not been made, between either Company or
any of their respective Subsidiaries and either the United States Government or an
agency or other entity of a State or local government.
(iv) “Government Subcontract” means any subcontract, blanket purchase
agreement, basic ordering agreement, letter subcontract, delivery order, task order
or purchase order on which final payment has not been made, between either Company
or any of their respective Subsidiaries and any prime contractor to either the
United States Government, or an agency or other entity of a State or local
government, or any subcontractor with respect to a Government Prime Contract.
(v) “State and Local Government” means any state, territory or possession of
the United States, any department or agency of any of the above with statewide
jurisdiction and responsibility, or any department or agency of a local jurisdiction
of such State.
(vi) “Teaming Agreement” has the same meaning as the term, “Contractor team
arrangement,” as defined in Federal Acquisition Regulation (“FAR”) 9.601.
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(vii) “United States Government” means the United States Government or any
department, agency or instrumentality thereof.
(b) Except as set forth on Schedule 3.27(b), all the Government Contracts listed on
Schedule 3.27(a) are, as of the date hereof, and will be immediately prior to the Closing
(except to the extent such Government Contracts expire prior to the Closing at their scheduled
expiration dates in accordance with their terms) (i) in full force and effect and (ii) represent
the legal, valid and binding obligations of a Company or one of its Subsidiaries party thereto and,
to the knowledge of the applicable Company, represent the legal, valid and binding obligations of
the other parties thereto. Except as set forth on Schedule 3.27(b), neither Company nor
any of their respective Subsidiaries party thereto nor, to the knowledge of each Company, any other
party thereto is in material breach of or material default under any such Government Contract. To
the knowledge of each Company, no condition or event exists or has occurred which, with notice or
lapse of time or both, would, as of the date of this Agreement or immediately prior to the Closing,
constitute a material default or a basis for force majeure under any such Government Contract
listed on Schedule 3.27(a), and neither Company nor any of their respective Subsidiaries
has received written or, to the knowledge of such Company, oral notice from any other Person
claiming or threatening to claim such a condition or event exists or has occurred.
(c) Certain Matters Relating to Government Contracts.
(i) All representations and certifications executed, acknowledged or set forth
in or pertaining to Government Contracts were current, accurate and complete in all
material respects when made, each of the Companies or their respective Subsidiaries
has complied in all material respects with all such representations and
certifications to the extent they impose ongoing obligations.
(ii) Neither Company nor any of their respective Subsidiaries nor, to the
knowledge of either Company or any of their respective Subsidiaries, any of
their respective directors, officers or employees is (or has been at any time
since January 1, 2004) suspended or debarred from doing business with the United
States Government or any State or Local Government, or has been declared
nonresponsible or ineligible for United States Government or State or Local
Government contracting. There are no circumstances that would warrant (x) the
institution of suspension or debarment proceedings against either Company or any of
their respective Subsidiaries, (y) to the knowledge of either Company, criminal or
civil fraud or other criminal or civil proceedings against any of the officers,
directors or employees of either Company or any of their respective Subsidiaries, or
(z) to the knowledge of either Company, a determination of nonresponsibility or
ineligibility of either Company or any of their respective Subsidiaries in the
future.
(iii) Neither Company nor any of their respective Subsidiaries nor, to the
knowledge of either Company or any of their respective Subsidiaries, except as set
forth on Schedule 3.27(c)(iii), or any of its agents or consultants is (or
has been, since January 1, 2004) under administrative, civil (including, but not
limited
51
to, claims made under the False Claims Act) or criminal investigation,
indictment or information or audit with respect to any alleged irregularity,
misstatement or omission arising under or relating to any Government Contract other
than routine audits by the Defense Contract Audit Agency or an agency inspector
general.
(iv) As of the date of this Agreement there exists no written notice of any
outstanding material claims against either Company or any of their respective
Subsidiaries by the United States Government, any State or Local Government, or any
prime contractor, subcontractor, vendor or other third party, arising under or
relating to any Government Contract.
(v) Since January 1, 2004, neither Company nor any of their respective
Subsidiaries has, with respect to any Government Contract, received a material cure
notice or material show cause notice advising such Company or Subsidiary that it was
in default or would, if it failed to take remedial action, be in default under such
Government Contract.
(vi) As of the date of this Agreement, other than routine contract audits by
the Defense Contract Audit Agency or an agency Inspector General, since January 1,
2004, neither Company nor any of their respective Subsidiaries has been audited by
any Governmental Authority and, to the knowledge of each Company and their
respective Subsidiaries, no such audit is underway or threatened.
3.28 Absence of Certain Business Practices. Since January 1, 2004, neither Company, its
respective Subsidiaries or, to the knowledge of such Company, any of its officers, employees or
agents or any other Person authorized to act, and acting, on behalf of such Company or its
Subsidiaries has, directly or indirectly (i) given, offered, solicited or agreed to give, offer or
solicit any contribution, gift, bribe, rebate, payoff, influence payment, kickback or other payment, regardless of form and whether in money, property or
services, to any customer, supplier, governmental employee or other Person who is or may be in a
position to help or hinder such Company or its Subsidiaries in connection with the development,
marketing, use, sale or acceptance of products or services of such Company or its Subsidiaries (or
to assist such Company or its Subsidiaries in connection with any actual or proposed transaction
relating to the products and services of such Company or its Subsidiaries) except to the extent
permitted by law; (ii) used any corporate funds or, to the knowledge of such Company, any personal
funds for unlawful contributions, gifts, entertainment, or other unlawful expenses relating to
political activity; (iii) made any unlawful payment to domestic government officials or employees,
or to domestic political parties or campaigns, from corporate funds; (iv) violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended; (v) established or maintained any unlawful
or unrecorded fund of corporate monies or other assets; or (vi) made any false or fictitious entry
on the books or records of such Company relating to any such payments.
3.29 Product Liability and Warranty Claims. Except as set forth on Schedule 3.29, there
are no material product liability or warranty claims pending or, to the knowledge of each Company,
threatened in writing against such Company or any of its Subsidiaries that (i) are not covered by
insurance (other than deductibles or self-retention amounts under such insurance
52
policies) and (ii) which such Company reasonably expects will result in costs or damages to the Company in excess of
$250,000 individually.
3.30 State Takeover Statutes. The Board of Directors of each Company has unanimously approved
the terms of this Agreement and the consummation of the Landmark Merger or the Standard Merger, as
the case may be, and the other transactions contemplated by this Agreement related thereto, and
such approval is sufficient to render inapplicable to the Landmark Merger or the Standard Merger,
as the case may be, this Agreement and the other transactions contemplated hereby the provisions of
Section 203 of the DGCL to the extent, if any, such Section is applicable thereto. No other state
takeover statute or similar statute or regulation applies to or purports to apply to the Mergers,
this Agreement and the other transactions contemplated hereby.
3.31 No Limitation on Other Representations. Except as otherwise expressly provided in this
Agreement, nothing in any representation or warranty made by Standard Aero or Landmark in this
Agreement (including, without limitation, those contained in this Article III) shall in any way
limit or restrict the scope, applicability or meaning of any other representation or warranty made
by Standard Aero or Landmark herein. Nothing in any representation or warranty in this Article III
shall in any way limit or restrict the scope, applicability or meaning of any other representation
or warranty set forth in this Article III, and each representation and warranty in this Article III
shall be given full separate and independent effect.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror represents and warrants to the Companies as follows:
4.1 Corporate Organization
(a) Acquiror has been duly incorporated under the laws of the Dubai International Financial
Center and has the corporate power and authority to own or lease its properties and to conduct its
business as it is now being conducted. The copies of the organizational documents of Acquiror,
certified by the Secretary of Acquiror, previously delivered by Acquiror to the Companies, are
true, correct and complete. Acquiror is duly licensed or qualified and in good standing as a
foreign corporation in all jurisdictions in which its ownership of property or the character of its
activities is such as to require it to be so licensed or qualified, except where failure to be so
licensed or qualified would not have a material adverse effect on the ability of Acquiror to enter
into this Agreement or consummate the transactions contemplated hereby.
(b) Each Merger Sub has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware and each has the corporate power and
authority to own or lease its properties and to conduct its business as it is now being conducted.
The copies of the Certificate of Incorporation of each Merger Sub, certified by the Secretary of
the State of Delaware, and their Bylaws, certified by the Secretary of each Merger Sub,
respectively, previously delivered by Acquiror to the Companies, are true, correct and complete.
Each Merger Sub is duly licensed or qualified and in good standing as a foreign
53
corporation in all jurisdictions in which its ownership of property or the character of its activities is such as to
require it to be so licensed or qualified, except where failure to be so licensed or qualified
would not have a material adverse effect on the ability of a Merger Sub to enter into this
Agreement or consummate the transactions contemplated hereby.
4.2 Due Authorization
Acquiror and each Merger Sub has all requisite corporate power and authority to execute and
deliver this Agreement and to perform all obligations to be performed by it hereunder. The
execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized and approved by the Board of Directors of Acquiror and
each Merger Sub and approved by the stockholder of each Merger Sub, and no other corporate
proceeding on the part of Acquiror or each Merger Sub is necessary to authorize this Agreement.
This Agreement has been duly and validly executed and delivered by each of Acquiror and each Merger
Sub and this Agreement constitutes a legal, valid and binding obligation of Acquiror and each
Merger Sub, enforceable against Acquiror and each Merger Sub in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors’ rights generally and subject, as to enforceability, to general principles
of equity.
4.3 No Conflict
Except as set forth in Schedule 4.3, the execution and delivery of this Agreement by
Acquiror and each Merger Sub and the consummation of the transactions contemplated hereby and the
performance by each Company of its obligations hereunder does not and will not (a) violate or
conflict with any provision of, or result in the breach of any applicable law, rule or regulation
of any Governmental Authority or any order, judgment or decree applicable to Acquiror and each
Merger Sub, (b) violate or conflict with the Certificate of Incorporation, Bylaws, as amended, or
other organizational documents of Acquiror and each Merger Sub or (c) result in a breach of, or
constitute a default (or event which, with the giving of notice or lapse of time, or both, would
become a default) under, or give to any Person any rights of termination, amendment, acceleration
or cancellation of, or result in the creation of any Lien on any of the properties or assets of
Acquiror or each Merger Sub, or require a consent or waiver under, or result in the imposition or
payment of any penalty, in each case pursuant to (i) any material Contract to which Acquiror or any
Merger Sub is a party or by which any of their respective assets are bound, (ii) any material
permit, license, authorization or approval from any Governmental Authority or other Person, (iii)
any note, bond, mortgage, indenture or other Indebtedness, except in the case of clauses (c)(i) and
(c)(ii), for Permitted Liens.
4.4 Litigation and Proceedings
Except as set forth on Schedule 4.4, there are no civil, criminal or administrative
lawsuits, actions, suits, claims, hearings or other proceedings at law or in equity, or, to the
knowledge of Acquiror, investigations, before or by any court or arbitrator or any Governmental
Authority or, to the knowledge of Acquiror, threatened, against Acquiror or a Merger Sub. Except
as set forth on Schedule 4.4, there is no unsatisfied judgment or any open injunction binding upon
Acquiror or a Merger Sub which would reasonably be expected to have a material
54
adverse effect on the ability of Acquiror or a Merger Sub to enter into and perform its obligations under this
Agreement.
4.5 Governmental Authorities; Consents
Assuming the truth and completeness of the representations and warranties of the Companies
contained in this Agreement, no consent, waiver, approval, license, registration, order, permit or
authorization of, or designation, declaration or filing with, any Governmental Authority or other
third party is required on the part of Acquiror or a Merger Sub with respect to Acquiror’s or a
Merger Sub’s execution or delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) applicable requirements of the HSR Act, the Competition Act or
any similar foreign law; (ii) the Exon-Xxxxxx Amendment and (iii) as otherwise disclosed in
Schedule 4.5.
4.6 Financial Ability (i) The Letter of Credit and (ii) true, correct and complete copies of the debt commitment
letters, dated as of April 2, 2007, among Barclays Bank Plc, Xxxxxx Brothers Commercial Bank,
Xxxxxx Brothers Inc. and DAE Aviation Holdings, Inc. (the “Debt Commitment Letter”)
pursuant to which Barclays Bank Plc, Xxxxxx Brothers Commercial Bank, Xxxxxx Brothers Inc. have
agreed, subject to the terms and conditions set forth therein, to provide or cause to be provided
up to an aggregate amount of $1,197,000,000 of debt financing in connection with the transactions
contemplated by this Agreement have been provided by Acquiror to the Companies. The fee letter
referenced in the Debt Commitment Letter does not contain any condition precedent to, or any
limitation on the amount of funds available at the time of, the initial borrowing under the
financing contemplated by the Debt Commitment Letter, other than those conditions precedent or
limitations contained in the Debt Commitment Letter. Subject to receipt of the funds contemplated
by the Debt Commitment Letter, and subject to the terms and conditions of this Agreement, at
Closing Acquiror will have sufficient funds to consummate the transactions contemplated by this
Agreement, including without limitation, to pay the Funding Amount and to pay all related fees and
expenses.
(a) A true, correct and complete copy of the unaudited consolidated balance sheet of Acquiror
and its consolidated Subsidiaries as of December 31, 2006 has been provided by Acquiror to the
Companies. Such balance sheet presents fairly, in all material respects, the consolidated
financial position of Acquiror and its consolidated Subsidiaries as of December 31, 2006.
4.7 Brokers’ Fees. Except fees described on Schedule 4.7 (which fees shall be the sole
responsibility of Acquiror), no broker, finder, investment banker or other Person is entitled to
any brokerage fee, finders’ fee or other commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by Acquiror or any of its Affiliates.
4.8 Operations of Merger Subs. Each Merger Sub was formed solely for the purpose of engaging
in the transactions contemplated hereby, has engaged in no other business activities and has
conducted its operations only as contemplated by this Agreement.
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4.9 No Outside Reliance. Notwithstanding anything contained in this Article IV or any other
provision hereof, Acquiror acknowledges and agrees that neither Company nor any of their
Affiliates, agents or representatives is making any representation or warranty whatsoever, express
or implied, beyond those expressly given in this Agreement, including any implied warranty or
representation as to condition, merchantability, suitability or fitness for a particular purpose or
trade as to any of the assets of the Companies or their Subsidiaries.
4.10 Acquisition of Interests for Investment. Acquiror has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and risks of its
participation in the Mergers. Acquiror understands and agrees that common stock of the Landmark Surviving Corporation and the Standard
Surviving Corporation may not be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act of 1933, as amended, except
pursuant to an exemption from such registration available under such Act, and without compliance
with state, local and foreign securities laws, in each case, to the extent applicable.
4.11 Business Relationships. To the knowledge of Acquiror, neither Acquiror nor any of its
Subsidiaries, has a customer or supplier relationship with, or is a party to any Contract with any
person or entity that is, and neither Acquiror, its shareholders or Subsidiaries, nor any of their
respective officers or directors is, (i) on the U.S. Department of Treasury Office of Foreign
Assets Control (“OFAC”) list of specially designated nationals and blocked persons (the
“SDN List”); (ii) owned or controlled by or acting on behalf of a person or entity on the
SDN List; (iii) otherwise the target of economic sanctions administered by OFAC; or (iv) owned or
controlled by or acting on behalf of a person or entity that is otherwise the target of economic
sanctions administered by OFAC.
4.12 Separate and Independent Effect. Nothing in any representation or warranty in this Article
IV shall in any way limit or restrict the scope, applicability or meaning of any other
representation or warranty set forth in this Article IV, and each representation and warranty in
this Article IV shall be given full separate and independent effect.
ARTICLE V.
COVENANTS OF THE COMPANIES
COVENANTS OF THE COMPANIES
5.1 Conduct of Business. From the date of this Agreement through the Closing, each Company
shall, and shall cause its Subsidiaries to, except as contemplated by this Agreement, or as
consented to by Acquiror in writing (which consent shall not be unreasonably conditioned, withheld,
delayed or denied), (i) operate its business in the ordinary course consistent with past practice,
(ii) use commercially reasonable efforts to preserve intact their business organizations, keep
available the services of executive officers and key employees of the Companies and their
Subsidiaries, preserve the current significant business relationships that the Companies and their
Subsidiaries have with their respective customers and suppliers and (iii) use commercially
reasonable efforts not to take any action inconsistent with this Agreement. Without limiting the
generality of the foregoing, except as set forth on Schedule 5.1 or consented to by
Acquiror in writing (which consent shall not be unreasonably conditioned, withheld, delayed or
denied), neither Company shall, and each Company shall cause its Subsidiaries not to, except as
specifically contemplated by this Agreement:
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(a) change or amend the Certificate of Incorporation, Bylaws or other organizational
documents of such Company or its Subsidiaries, except as otherwise required by law;
(b) make, pay or declare any dividend or distribution to the stockholders of such Company, or
set aside any funds for the purpose thereof, or redeem or repurchase any capital stock of the
Companies or issue any capital stock or any rights (including options) to acquire any interests in
any capital stock of either Company (other than common stock issuable upon exercise of outstanding
options) or amend any term of any class or series of outstanding securities of either Company
(other than with respect to the vesting of outstanding options);
(c) enter into, materially and adversely modify, terminate or renew any Contract of a type
required to be listed on Schedule 3.13 or Schedule 3.15, except in the ordinary
course of business consistent with past practice; provided, however, that
notwithstanding the foregoing, neither Company nor any of its Subsidiaries shall (i) amend any
Contract or modify any business practice to provide for the prepayment prior to the Closing Date by
any customer of such Companies or its Subsidiaries of any material amounts for services to be
performed or goods to be delivered after the Closing Date other than in respect of power by the
hour contracts entered into in the ordinary course of business (provided that payments under such
power by the hour contracts are made in accordance with the terms of such contracts) or (ii)
replace, modify, amend, terminate or renew the Operating Agreement by and between AlliedSignal Inc.
and CFC Aviation Services, L.P., dated June 30, 1994, as amended, without the prior written consent
of Acquiror (which consent shall not be unreasonably conditioned, withheld, delayed or denied);
(d) revalue any of its material Assets, including writing off receivables or reserves, other
than as required by GAAP, applied consistently with past practice, or applicable law;
(e) sell, assign, transfer, convey, lease, mortgage, pledge or otherwise dispose of any
material Assets or properties except for sales of inventory or obsolete Assets in the ordinary
course of business consistent with past practice;
(f) (i) except as otherwise required by law, existing Employee Plans or consistent with past
practice, take any action with respect to the grant of any severance, termination pay or
transaction bonuses (other than (x) pursuant to policies or agreements of such Company or any of
its Subsidiaries in effect on the date of this Agreement or (y) transaction bonuses to senior
executives of the Companies, the aggregate amount of which shall not exceed $5,000,000, which
bonuses, if any, will be paid at the Closing as a Holder Allocable Expense) which will become due
and payable on or after the Closing Date and none of which shall fail to be deductible by reason of
Section 280G of the Code; (ii) make any material change in the key management structure of such
Company or any of its Subsidiaries, including, without limitation, the hiring of additional
officers or the termination of existing officers, other than in the ordinary course of business;
(iii) adopt, enter into or materially amend any Employee Plan or increase the compensation or
benefits payable or to become payable to its directors or executive officers, in each case except
in the ordinary course of business; or (iv) increase the compensation or benefits payable or to
become payable to its other employees or its consultants (in each case, except for
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increases in the ordinary course of business substantially in accordance with past practices
and methodologies);
(g) affect or permit a “plant closing” or “mass layoff” as defined by the WARN Act without
fully complying with the WARN Act;
(h) acquire by merger or consolidation with, or merge or consolidate with, or purchase any
business, or all or substantially all of the assets, of any corporation, partnership, association,
joint venture or other business organization or division thereof that would (i) be material to the
business of the Combined Companies (other than in the ordinary course of business), except for
Permitted Acquisitions, or (ii) constitute part of the FBO Business (other than aircraft, the
acquisition of which is financed by means of Aircraft Financing Indebtedness);
(i) fail to make capital expenditures in accordance with the applicable Company’s capital
expenditure budget a copy of which has been provided to Acquiror prior to the date hereof;
(j) make any material loans or material advances to any Person, except for advances to
employees or officers of such Company or its Subsidiaries for expenses incurred in the ordinary
course of business consistent with past practice;
(k) subject to Section 5.6 hereof, fail to use commercially reasonable efforts to collect
accounts receivable and pay accounts payable other than in the ordinary course of business
consistent with past practice;
(l) enter into any Related Party Transaction;
(m) change any accounting or financial reporting methods of the Companies or any of their
respective Subsidiaries or make any material Tax election, enter into any Tax allocation agreement,
Tax sharing agreement, Tax indemnity agreement or closing agreement, in each case involving a
material amount of Taxes, settle or compromise any claim, notice, audit report or assessment in
respect of a material amount of Taxes, or consent to any extension or waiver of the limitation
period applicable to any claim or assessment in respect of a material amount of Taxes;
(n) fail to use commercially reasonable efforts to maintain or renew any License set forth on
Schedule 3.19 (except to the extent such License is no longer material to the operation of the
business of either of the Companies or their respective Subsidiaries);
(o) do any other act which would reasonably be expected to cause any condition set forth in
Section 9.1 or Section 9.2 not to be satisfied; or
(p) enter into any agreement, or otherwise become obligated, to do any action prohibited under
this Section 5.1.
5.2 Inspection. Subject to confidentiality obligations and similar restrictions that
may be applicable to information furnished to a Company or any of its Subsidiaries by third-parties
that may be in such Company’s or any of its Subsidiaries’ possession from time to time,
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each Company shall, and shall cause its Subsidiaries to, (i) afford to Acquiror and its
accountants, counsel and other representatives reasonable access, during normal business hours, in
such manner as to not interfere with normal operation of such Company and its Subsidiaries, to all
of their respective properties, books, contracts, commitments, tax returns, records and appropriate
officers and employees of such Company and its Subsidiaries, and shall furnish such representatives
with all financial and operating data and other information concerning the affairs of such Company
and its Subsidiaries as such representatives may reasonably request, (ii) furnish to Acquiror
within 45 days of the end of each month following the date hereof, an unaudited monthly
consolidated balance sheet of each Company and its Subsidiaries for the month then ended and
related consolidated statements of earnings and cash flows, and (iii) furnish to Acquiror, promptly
upon receipt thereof, any written communication from any customer or supplier named on Schedule
3.24 of any intention or threat to terminate or materially reduce purchases from or supplies to
either Company or their respective Subsidiaries. Notwithstanding the foregoing, neither Company
nor any of their Subsidiaries shall have any obligation to permit access to their facilities or any
other real property owned, leased or used by any of them for the purpose of, and Acquiror shall
have no right to conduct, any environmental compliance testing or investigation at any of such
facilities or real property including “Phase I”, “Phase II” or any other invasive testing or
sampling. Acquiror will indemnify the Companies and hold the Companies harmless in respect to any
loss, liability, damage, judgment, cost and expense (including attorney’s fees) arising from any
claim by a third party for personal injury or property damage that results from Acquiror’s or any
of its representative’s inspection and investigation pursuant to this Section 5.2.
5.3 HSR Act and Foreign Antitrust Approvals. In connection with the transactions contemplated by this Agreement, each Company shall (and, to
the extent required, shall cause its Affiliates to) (i) comply promptly with the notification and
reporting requirements of the HSR Act and use its commercially reasonable efforts to obtain early
termination of the waiting period under the HSR Act, (ii) promptly make (or, as promptly as
reasonably practicable, provide any information in the possession of the Companies necessary for
Acquiror to make) such other filings with any similar foreign Governmental Authorities as may be
required under any applicable similar foreign law, including under the Competition Act, and (iii)
promptly make (or, as promptly as reasonably practicable, provide any information in the possession
of the Companies necessary for Acquiror to make) any filings required to be made prior to Closing
in connection with any act relating to foreign investment, ownership and control of the Companies
in any country in which the Companies operate. Each Company shall substantially comply with any
additional requests for information, including requests for production of documents and production
of witnesses for interviews or depositions, by any Antitrust Authority.
5.4 No Solicitations. From the date of this Agreement through the earlier of the Closing or the termination of this
Agreement pursuant to the terms hereof, none of the Companies shall, nor shall they permit their
respective Subsidiaries, Affiliates, officers, directors, employees, representatives and agents to,
directly or indirectly, to (i) encourage, solicit, participate in or initiate discussions or
negotiations with, consider or entertain any inquiries or proposals from, or provide any
information to, any Person or group of Persons (other than Acquiror, the Merger Subs or any of
their respective Affiliates) concerning any merger, sale of all or substantially all of the assets
of either of the Companies, sale of shares of capital stock or similar transactions involving
Landmark, Standard Aero or any of their respective Subsidiaries
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or any business unit thereof (a “Competing Transaction”) or (ii) enter into any agreement
any third party in connection with any such transaction. Immediately following the execution of
this Agreement, the Companies, shall, and shall direct their respective Subsidiaries, Affiliates,
officers, directors, employees, representatives and agents to, immediately terminate any
discussions or negotiations initiated prior to the date hereof relating to a Competing Transaction.
The Companies shall, and shall cause their respective Subsidiaries and Affiliates to, promptly
notify Acquiror orally and in writing if any third party makes a bona fide written proposal with
respect to a Competing Transaction and such notification shall include the material terms of any
such proposal or offer and the identity of such party.
5.5 Cooperation with Financing.
Prior to the Closing, each of the Companies shall, and shall cause its respective
Subsidiaries, and shall use its commercially reasonable efforts to cause its and their respective,
officers and employees to, provide to Acquiror all cooperation reasonably requested by Acquiror
that is necessary, proper or advisable in connection with the financing transactions contemplated
by the Debt Commitment Letters (the “Debt Financing”), including (i) participation in a
reasonable number of meetings, presentations, road shows, due diligence sessions and sessions with
rating agencies, (ii) assisting with the preparation of materials for rating agency presentations,
bank information memoranda, and similar documents required in connection with the Debt Financing,
including execution and delivery of customary representation letters reasonably satisfactory in
form and substance to such Company in connection with bank information memoranda, (iii) using
commercially reasonable efforts to furnish Acquiror and its Debt Financing sources with financial
and other information regarding such Company and its Subsidiaries as may be reasonably requested by
Acquiror, including all financial statements, pro forma financial information, financial data,
audit reports and other information of the type required by Regulation S-X and Regulation S-K under
the Securities Act, or as otherwise required in connection with the Debt Financing, (iv) using
commercially reasonable efforts to assist Acquiror to obtain accountants’ comfort letters, surveys,
engineering reports, title insurance and other documentation and items relating to the Debt
Financing as reasonably requested by Acquiror, (v) using commercially reasonable efforts to execute
and deliver any pledge and security documents, other definitive financing documents, or other
certificates, or documents as may be reasonably requested by Acquiror (including a certificate of
the Chief Financial Officer of such Company or any Subsidiary with respect to solvency matters) and
otherwise reasonably facilitating the pledging of collateral (including cooperation in connection
with the pay off of existing indebtedness and the release of related Liens, if any), provided that
no obligation of the Company or any Subsidiary under such executed documents shall be effective
until the Closing, (vi) using commercially reasonable efforts to (x) permit the prospective lenders
involved in the Debt Financing to evaluate the Company’s current assets, cash management and
accounting systems, policies and procedures relating thereto for the purposes of establishing
collateral arrangements, (y) permit prospective lenders involved in the debt financing to complete
reasonable customer and supplier due diligence (but in no event shall prospective lenders be
entitled to contact customers and suppliers directly without the Companies’ consent), and (z)
establish bank and other accounts in connection with the foregoing, and (vii) using commercially
reasonable efforts to obtain customary waivers, consents, estoppels and approvals from other
parties to material leases to which either Company or any of its Subsidiaries is a party (it being
understood and agreed that obtaining any such waiver, consent,
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estoppel or approval shall not be a condition to Closing the transactions contemplated
hereby). Each of the Companies hereby consents to the use of its and its Subsidiaries’ logos as
may be reasonably necessary in connection with the Debt Financing; provided, that such
logos are used solely in a manner that is not intended to nor reasonably likely to harm or
disparage such Company or any of its Subsidiaries or the reputation or goodwill of such Company or
any of its Subsidiaries and its or their marks. Nothing in this Section 5.5 shall require the
Companies or any of their respective Subsidiaries to provide any assistance to the extent it would
interfere unreasonably with the ongoing business or operations of such Company or any of its
Subsidiaries. Notwithstanding anything in this Section 5.5 to the contrary, neither the Companies
nor any of their respective Subsidiaries shall be required to pay any commitment fee or similar fee
or incur any liability with respect to the Debt Financing prior to the Closing. Promptly following
any written request by the Companies, and in any event prior to the close of business on the
Business Day immediately prior to the Closing Date, Acquiror shall reimburse the Companies for any
out-of-pocket fees and expenses paid by any of them in connection with their cooperation pursuant
to this Section 5.5. Acquiror shall indemnify and hold harmless the Companies and each of their
respective officers, directors, employees and representatives for any liabilities, losses or other
damages of any kind suffered or incurred by them in connection with the arrangement of or
consummation of the Debt Financing.
5.6 Affiliate Transactions
Each of the Companies shall cause (i) all accounts, whether payables or receivables, between
either Company or any of their respective Subsidiaries, on the one hand, and any of Carlyle
Landmark or Carlyle Standard or any of their respective Affiliates (other than the Companies and
their Subsidiaries), on the other hand, to be paid in full at or prior to the close of business on
the Business Day immediately preceding the Closing Date; and (ii) all other Related Party
Transactions, including, without limitation, any management or other similar agreements, to be
terminated without any termination or other payment (except for the payment of any amounts due and
owing at such time under such Related Party Transactions in accordance with the terms thereof) with
no further liability or obligations or other force or effect after the Closing. Notwithstanding
the foregoing, nothing in this Section 5.6 shall affect the commercial agreements between the
Companies, on the one hand, and portfolio companies of any investment fund that is an Affiliate of
Carlyle Standard or Carlyle Landmark, on the other hand.
5.7 Information Statement
Promptly, but in no event later than fifteen (15) Business Days after the receipt of the
Requisite Stockholder Approvals, each of the Companies shall prepare and distribute to the
stockholders of Landmark and Standard Aero who have not executed and delivered the Landmark
Stockholder Written Consent or the Standard Stockholder Written Consent, as the case may be, an
information statement, which shall include all notices required under Delaware law, including,
without limitation, the notice required pursuant to Section 228 of the DGCL (together with any
amendments thereof or supplements thereto, the “Information Statement”) and any other
information required to be provided to the stockholders of Landmark and Standard Aero in accordance
with Delaware law relating to the adoption of this Agreement and the approval of the Mergers by
such stockholders. Acquiror shall be provided with a reasonable opportunity to review and comment
on the Information Statement. Acquiror shall cooperate with
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the Companies in the preparation of the Information Statement and promptly provide all
information regarding Acquiror reasonably requested by the Companies for inclusion in the
Information Statement. Other than with respect to such information provided by Acquiror, the
Companies shall be solely responsible for the preparation, form and substance of the Information
Statement.
5.8 Interested Parties
From and after the date hereof through the Closing Date, to the extent that either of the
Companies has actual knowledge that any Person contacted either of the Companies or any of their
respective Subsidiaries regarding such Person’s interest in a proposed FBO Business Sale
Transaction (including any Person who, to the actual knowledge of the Companies, contacted either
of the Companies or any of their respective Subsidiaries on or after March 19, 2007 it being
understood that no written record of such contacts was maintained), such Company shall promptly
notify an individual designated by the FBO Financial Advisor of the identity of such Person.
ARTICLE VI.
COVENANTS OF ACQUIROR
COVENANTS OF ACQUIROR
6.1 HSR Act and Foreign Antitrust Approvals.
(a) In connection with the transactions contemplated by this Agreement, Acquiror shall (and,
to the extent required, shall cause its Affiliates to) (i) comply promptly with the notification
and reporting requirements of the HSR Act and use its commercially reasonable efforts to obtain
early termination of the waiting period under the HSR Act, (ii) promptly make (or, as promptly as
reasonably practicable, provide any information in the possession of Acquiror necessary for the
Companies to make) such other filings with any foreign Governmental Authorities as may be required
under any applicable similar foreign law, including the Competition Act and use its commercially
reasonable efforts to obtain termination, waiver or expiration of any applicable waiting periods
and/or to obtain any other clearances or required approvals required under such laws, and (iii)
promptly make (or, as promptly as reasonably practicable, provide any information in the possession
of Acquiror necessary for the Companies to make) any filings required to be made prior to Closing
in connection with any act relating to foreign investment, ownership and control of the Companies
in any country in which the Companies operate. Acquiror shall substantially comply with any
additional requests for information, including requests for production of documents and production
of witnesses for interviews or depositions, by any Antitrust Authorities.
(b) Acquiror shall exercise commercially reasonable efforts to prevent the entry in any Action
brought by an Antitrust Authority or any other Person of any Governmental Order which would
prohibit, make unlawful or delay the consummation of the transactions contemplated by this
Agreement.
(c) Acquiror shall cooperate in good faith with the Antitrust Authorities and other
Governmental Authorities and undertake promptly any and all action required to complete lawfully
the transactions contemplated by this Agreement, including proffering and consenting to
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a Governmental Order providing for the sale or other disposition, or the holding separate, of
particular assets, categories of assets or lines of business, of either assets or lines of business
of the Companies, or any other assets or lines of business of Acquiror. The entry by any
Governmental Authority in any Action of a Governmental Order permitting the consummation of the
transactions contemplated hereby but requiring any of the assets or lines of business of Acquiror
to be held separate thereafter (including the business and assets of the Companies and their
Subsidiaries) shall not be deemed a failure to satisfy the conditions specified in Section 9.1(b),
9.1(c), 9.1(d), 9.2(a), 9.2(b) or 9.2(c).
(d) Acquiror shall be solely responsible for and pay all filing fees payable to the Antitrust
Authorities or any other Governmental Authority in connection with the transactions contemplated by
this Agreement.
6.2 Indemnification.
(a) From and after the Effective Time of the Mergers, Acquiror agrees that it shall cause each
Surviving Corporation to continue to indemnify and hold harmless each present and former director
and officer of the applicable Company or any of its Subsidiaries against any costs or expenses
(including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities
incurred in connection with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of or pertaining to matters existing or
occurring at or prior to the Effective Time of the Mergers, whether asserted or claimed prior to,
at or after the Effective Time of the Mergers, to the fullest extent that such Company or any of
its Subsidiaries, as the case may be, would have been permitted under applicable law and its
charter or by-laws or other organizational documents in effect on the date of this Agreement to
indemnify such person (including the advancing of expenses as incurred to the fullest extent
permitted under applicable law), provided the person to whom such expenses are advanced
provides an undertaking to such Surviving Corporation to repay such advances if it is ultimately
determined that such person is not entitled to indemnification; provided, further,
that any determination required to be made with respect to whether an officer’s or director’s
conduct complies with the standards set forth under applicable law and the charter and by-laws or
other organizational documents of such Company or any of its Subsidiaries shall be made by
independent counsel mutually acceptable to TC Group, L.L.C. and such Surviving Corporation.
(b) Prior to the Effective Time of the Mergers, Acquiror shall, at Acquiror’s sole cost and
expense, cause each Surviving Corporation to obtain “tail” insurance policies with a claims period
of at least six (6) years from the Effective Time of the Mergers with respect to directors’ and
officers’, fiduciary and employment practices liability insurance covering those Persons who are
currently covered by the applicable Company’s or any of its Subsidiaries’ directors’ and officers’
liability insurance policies on terms not materially less favourable than the terms of such
insurance coverage in effect on the date of this Agreement for claims arising from facts or events
that occurred on or prior to the Effective Time of the Mergers; provided, however,
that if any claim is asserted or made within such six-year period, such insurance shall be
continued in respect of such claim until the final disposition thereof. Notwithstanding the
foregoing, neither Acquiror nor the Surviving Corporations’ Parent shall be obligated to obtain
such “tail” insurance to the extent the cost of such “tail” insurance exceeds 300% of the annual
premiums paid as of the date of this Agreement by the Companies for such insurance (such
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300% amount, the “Maximum Premium”). If such “tail” insurance coverage can only be
obtained at a cost in excess of the Maximum Premium, Acquiror shall cause the Surviving
Corporations to obtain and maintain one or more “tail” policies with the most favorable coverage
available for a cost equal to the Maximum Premium.
6.3 Continued Employment.
(a) For a period of no less than one year following the Closing Date, Acquiror shall cause
each Surviving Corporation to continue to provide the employees of the applicable Company and its
Subsidiaries with employment at a level of salary, wages, bonus opportunities, commissions, if
applicable, and benefits (other than equity based compensation) which in the aggregate are at least
substantially equivalent to the salary, wages, bonus opportunities, commissions, if applicable, and
benefits provided prior to the Closing Date by such Company or its Subsidiaries taken as a whole.
No provision of this Agreement shall be construed (i) as a guarantee of continued employment of any
employee of each Company or its Subsidiaries and this Agreement shall not be construed so as to
prohibit each Surviving Corporation or its Subsidiaries from having the right to terminate the
employment of any employee of such Surviving Corporation or its Subsidiaries or (ii) to require
each Surviving Corporation to continue any Employee Plan or prevent the amendment, modification or
termination thereof after the Effective Time of the Mergers as long as Acquiror complies with its
obligations hereunder.
(b) Benefits.
(i) Each employee and former employee of a Company and its Subsidiaries shall
be credited with his or her years of service with such Company and its Subsidiaries
(and any predecessor entities thereof) before the Closing Date under any employee
benefit plan of Acquiror and its Subsidiaries providing benefits similar to those
provided under such Employee Plan to the same extent as such employee or former
employee was entitled, before the Closing Date, to credit for such service under
such Employee Plan, except to the extent that such crediting would result in
duplication of benefits and provided that no prior service credit shall be
recognized for purposes of (A) benefit accrual, level of pay credits and/or
grandfathering under any defined benefit plan or (B) post-retirement welfare
benefits.
(ii) With respect to the calendar year in which Acquiror ceases to maintain any
particular Employee Plan, each employee shall be given credit for amounts paid under
such Employee Plan for purposes of applying deductibles, co-payments and
out-of-pocket maximums as though such amounts had been paid in accordance with the
terms and conditions of the parallel plan, program or arrangement of Acquiror.
(iii) Acquiror shall, and shall cause the Surviving Companies and their
Affiliates and any employee benefit plans which any of them sponsors or maintains
for the benefit of their employees to, use commercially reasonable efforts to waive
all limitations as to pre-existing conditions, exclusions, waiting periods and
evidence of insurability requirements with respect to participation and
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coverage of employees of the Companies and their Subsidiaries and their eligible dependents in any
welfare plan maintained by Acquiror, each Surviving Company or any of their Affiliates, to the
extent permitted by law and to the extent waived under comparable Employee Plans.
6.4 Financing. Acquiror shall use its commercially reasonable efforts to arrange and consummate the financing
transactions contemplated by the Debt Commitment Letter on the terms set forth therein (including,
without limitation, any market-flex or other similar provisions), or, if such financing is not
available, to obtain alternative financing on terms and conditions that are substantially similar,
taken as a whole; provided, however, that in no event will Acquiror be required to
seek or obtain financing on terms and conditions that would be less favorable to Acquiror than the
terms and conditions set forth in the Debt Commitment Letter. Without limiting the foregoing,
Acquiror shall use its commercially reasonable efforts (i) to negotiate in good faith respecting
such financing, (ii) to satisfy all conditions provided in the Debt Commitment Letter and the
definitive agreements relating thereto, (iii) if any portion of the financing contemplated by the
Debt Commitment Letter has become unavailable, regardless of the reason therefore, to obtain
alternative financing from the same or other sources on the terms specified above, and (iv) to
satisfy at or prior to the Closing all requirements of any agreements relating to the Debt
Commitment Letter which are conditions to closing under such agreements or to the drawdown of
proceeds thereunder. Acquiror will give the Companies prompt notice of any breach by any party to
the Debt Commitment Letter and shall keep the Companies informed as to the status of its efforts to
arrange the financing transactions contemplated by the Debt Commitment Letter. Acquiror shall not
permit any material amendment or modification to be made to, or any waiver of any material
provision or remedy under the Debt Commitment Letter without the prior written consent of the
Companies (such consent not to be unreasonably withheld, delayed or denied).
6.5 DoT Matters. On or prior to the Closing Date, Acquiror, at its own expense, shall arrange for and cause the
consummation of the sale or other disposition of each of the Part 135 certificates held by Landmark
or its Subsidiaries to a “citizen of the United States” as defined in 49 U.S.C. Sec. 40102(15) who
is an Unaffiliated Person or to surrender such Part 135 certificates to the Federal Aviation
Administration, such that the consummation of the transactions contemplated hereby will comply with
the regulations of the U.S. Department of Transportation (“DoT”) relating to the ownership
of such Part 135 certificates. Such disposition shall be conditioned upon the consummation of the
transactions contemplated hereby and shall be consummated immediately prior to the Closing.
Acquiror’s obligations under this Section 6.5 shall be deemed to be satisfied by the transfer of
such Part 135 certificates to the Voting Trust as contemplated by Section 7.4(a) hereof so long as
prior to Closing Acquiror obtains all consents of Governmental Authorities required under
applicable law to do so (including the consent of the DoT).
6.6 Solvency Opinion. Acquiror shall furnish or cause to be furnished to the Companies copies of any solvency opinions
or similar materials obtained from third parties in connection with the transactions contemplated
hereby (including the financing thereof), it being acknowledged and agreed that Acquiror shall have
no obligation under this Section 6.6 to procure any such opinions or similar materials. In no
event shall the provisions of this Section 6.6 create any obligation on Acquiror to cause any such
opinions or similar materials to be
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addressed to, or otherwise permit any reliance thereon by, any of the Companies or any of their
respective Affiliates or boards of directors or other similar governing bodies.
6.7 SR Technics Group. From the date hereof through the date of the Letter of Credit Termination Event, Acquiror agrees
that it shall not distribute the capital stock of SR Technics Group or any cash proceeds or other
property received in exchange for all or part of such capital stock or assets of SR Technics Group.
Notwithstanding the foregoing, in the event that this Agreement has been terminated pursuant to
Section 10.1(b)(i) or 10.1(c)(i) and the Companies and/or the Holder Representative have asserted a
claim for monetary damages against Acquiror or the Merger Subs in connection therewith, the
restrictions on distributions set forth in the immediately preceding sentence shall apply only to
the extent that the amount of the monetary damages asserted by the Companies and/or the Holder
Representative exceed the face amount of the Letter of Credit and, for the avoidance of doubt,
Acquiror shall be permitted to distribute any and all cash (or property having a fair market value)
in excess of the amount by which the monetary damages asserted by the Companies and/or the Holder
Representative exceed the face amount of the Letter of Credit.
ARTICLE VII.
JOINT COVENANTS
JOINT COVENANTS
7.1 Confidentiality.
(a) Use of Evaluation Materials. Except for any governmental filings required in
order to complete the transactions contemplated herein, and except as Acquiror and the Companies
may agree or consent in writing, each party hereto shall keep the Evaluation Materials
confidential, and, except as required by applicable law, no party shall disclose any Evaluation
Materials or any information contained therein to any Person; provided, however,
that any such information may be disclosed to those of such party’s directors, officers, employees,
agents and representatives who need to know such information for the purposes of evaluating the
transactions contemplated hereby (it being understood that such directors, officers, employees,
agents and representatives shall be informed by such party of the confidential nature of such
information and shall be directed by such party, and shall each agree to treat such information
confidentially in accordance with this Section 7.1(a)). Without limiting the generality of the
foregoing, in the event that the transactions contemplated hereby are not consummated, neither
party hereto nor its directors, officers, employees, agents or representatives shall use any of the
Evaluation Materials furnished to it by another party hereto for any purpose.
(b) Compelled Disclosure. In the event that any party hereto or any of its
representatives receives a request or is required (by applicable law, regulation or legal process)
to disclose all or any part of the information contained in the Evaluation Materials, such party or
its representatives, as the case may be, shall (i) promptly notify the disclosing party of the
existence, terms and circumstances surrounding such a request, (ii) consult with the disclosing
party on the advisability of taking legally available steps to resist or narrow such request and
(iii) assist the disclosing party in seeking a protective order or other appropriate remedy, if
available. In the event that such protective order or other remedy is not obtained or that the
disclosing party waives compliance with the provisions hereof, (x) such party or its
representatives, as the case may be, may disclose only that portion of the Evaluation Materials
which such party is advised
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by opinion of its legal counsel is legally required to be disclosed and shall exercise reasonable
efforts to assist the disclosing party in obtaining assurance that confidential treatment shall be
accorded such Evaluation Materials that are disclosed and (y) such party shall not be liable for
such disclosure unless such disclosure was caused by or resulted from a previous disclosure by such
party or its representatives not permitted by this Section 7.1.
7.2 Support of Transaction. Acquiror and the Companies shall each (and shall each cause their respective Affiliates to) (i)
other than with respect to CFIUS, which is the subject of Section 7.3, use commercially
reasonable efforts to promptly assemble, prepare and file any information (and as needed, to
supplement such information) as may be reasonably necessary to obtain as promptly as practicable
and to obtain as promptly as practicable (A) all governmental and regulatory consents, approvals or
authorizations required to be obtained in connection with the transactions contemplated hereby, (B)
all consents, approvals or authorizations of the Federal Aviation Administration necessary or
advisable in connection with the sale or other disposition of each Part 135 certificate pursuant to
Section 6.5, (C) all other consents, approvals or authorizations of the Federal Aviation
Administration or other aviation Governmental Authorities necessary or advisable as a result of the
transactions contemplated hereby, (ii) use commercially reasonable efforts to obtain all material
consents and approvals of third parties that any of Acquiror, the Companies, or their respective
Affiliates that are necessary or advisable in order to consummate the Mergers, and (iii) take such
other action as may reasonably be necessary or as another party may reasonably request to satisfy
the conditions of Article IX or otherwise to comply with this Agreement. Notwithstanding the
foregoing, in no event shall a Company or any of its Subsidiaries be obligated to bear any material
expense or pay any material fee or grant any material concession in connection with obtaining any
consents, authorizations, or approvals required in order to consummate the Mergers pursuant to the
terms of any Contract to which a Company or any of its Subsidiaries is a party.
7.3 CFIUS Approval. Each of Acquiror and the Companies shall use its reasonable best efforts to obtain as promptly
as reasonably practicable a written notification issued by the Committee on Foreign Investment in
the United States (“CFIUS”) that CFIUS has concluded a review of the notification
voluntarily filed jointly by Acquiror and the Companies pursuant to the Exon-Xxxxxx Amendment and
determined not to conduct a full investigation or, if a full investigation is deemed to be
required, notification that the United States Government will not take action to prevent the
consummation of the transactions contemplated by this Agreement (such determination or
notification, the “CFIUS Approval”). Without limiting the foregoing, the requirement of
Acquiror and the Companies to use their reasonable best efforts to obtain the CFIUS Approval shall
include (i) making any pre-notification and notification filings required in connection with the
CFIUS Approval within ten (10) days of the date Acquiror receives a written demand to make such
filings from the Companies, provided, however, in no event shall any such filings be made
(x) before the date that is thirty (30) days after the date hereof unless the Acquiror agrees in
writing to such earlier filing or (y) after the date that is forty-five (45) days after the date
hereof, or on such other date as Acquiror and the Holder Representative may mutually agree, (ii)
providing any information requested by CFIUS or any other agency or branch of the United States
Government in connection with their review of the transactions contemplated by this Agreement and
(iii) in the case of Acquiror, agreeing to one or more mitigation agreements with the United States
Government, which mitigation agreements may include, without limitation, an “evergreen provision”
and other provisions customarily included
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in such agreements; provided, that, subject to the next sentence, Acquiror is permitted to
manage the Combined Companies (other than the FBO Business) under any such mitigation agreement.
In addition, with respect to assets of the Combined Companies required to perform under contracts
or subcontracts relating to defense, Acquiror shall enter into one or more standard mitigation
agreements or other similar instruments with the United States Department of Defense
(“DoD”) and/or other CFIUS agencies as DoD and/or such other agencies may require to
mitigate Foreign Ownership Control and Influence.
7.4 Sale of FBO Business. Without limiting either party’s obligations under Section 7.3, Acquiror shall propose, negotiate
and use best efforts to enter into, a written agreement with certain of the CFIUS agencies (the
“FBO Business Disposition Agreement”) as promptly as reasonably practicable after the date
hereof (but in any event prior to the Termination Date) pursuant to which Acquiror will agree (i)
to cause Landmark to consummate a FBO Business Sale Transaction within one year following the
Closing Date (or such earlier time as CFIUS may require, as such time may be extended by CFIUS)
with a purchaser approved by, and on terms reasonably acceptable to, CFIUS and, unless otherwise
agreed to by Acquiror, having such other terms and conditions as are customary for a transaction of
such size and nature, (ii) following the Closing, to cause the Landmark Surviving Corporation
and/or its Subsidiaries to transfer all of their right title and interest in any equity interests
and other securities of the FBO Subsidiaries held by Acquiror or any of its Subsidiaries (including
the Landmark Surviving Corporation and its Subsidiaries) and any other assets used primarily by the
FBO Business (collectively, such equity interests, securities and other assets, the “FBO Trust
Property”) to an irrevocable trust established for the benefit of the Landmark Surviving
Corporation (the “Voting Trust”) pursuant to a written trust agreement (the “Trust
Agreement”), which Trust Agreement shall provide that the trustees of such Voting Trust (the
“FBO Trustees”) shall exercise all voting rights with respect to any voting securities
included in the FBO Trust Property and shall be designated as the sole managing member of the FBO
Subsidiaries during the period from the Closing to the consummation of the FBO Business Sale
Transaction such that the FBO Trustees exercise de jure and de facto control over the FBO Business
during such period in their sole and absolute discretion in a manner consistent with the FBO
Trustees Fiduciary Duties, (iii) following the Closing Date, to irrevocably appoint Xxxxx
Xxxxxxxxxxx, Xxxxxx Xxxxxx and Xxx Xxxxxxx (or such other individuals as are acceptable to CFIUS)
as the initial FBO Trustees, (iv) to retain Xxxxxxx Xxxxx (or such other nationally recognized
investment bank acceptable to CFIUS) to conduct a sale process with respect to the FBO Business
Sale Transaction, (v) following the Closing, to report regularly to CFIUS as to the status of the
FBO Business Sale Transaction and to provide any information reasonably requested by any of them
with respect to the FBO Business Sale Transaction or the operation of the FBO Business during the
period from the Closing to the consummation of the FBO Business Sale Transaction, (vi) that
following the Closing, Acquiror will not exercise control over or influence the management of the
FBO Business and will not in any way attempt to influence any operations, policies, procedures or
security in place at any facility operated by the FBO Business, (vii) that following the Closing,
the current management of the FBO Business will be retained by Acquiror unless the FBO Trustees
determine that any management employee should be terminated, and (viii) following the Closing, to
take such other actions, or to refrain from taking such other actions, as may be reasonably
requested by CFIUS in order to achieve the purposes described in the foregoing clauses (i) through
(vii). Acquiror shall use best efforts to comply in all material respects with the FBO Business
Disposition Agreement. In the event that Acquiror or certain of the CFIUS
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agencies do not enter into the FBO Business Disposition Agreement and the Closing nonetheless
occurs, Acquiror shall use best efforts to cause Landmark to consummate the FBO Business Sale
Transaction with a purchaser that is not an Affiliate of Acquiror in accordance with the foregoing
clauses (i) through (vii) as applicable. The parties hereto acknowledge and agree that Acquiror
shall have sole and absolute discretion regarding the terms and conditions of any proposed FBO
Business Sales Transaction.
(a) During the period from and after the date hereof, through the Closing, Landmark shall, and
shall cause its Subsidiaries to, use its and their commercially reasonable efforts to cause its and
their respective officers and employees to, provide to Acquiror all cooperation reasonably
requested by Acquiror in connection with the FBO Business Sale Transaction, including (x) assisting
with the preparation of an offering memorandum, materials for management presentations and other
similar materials and (y) using commercially reasonable efforts to prepare a data room containing
materials which would be reasonably requested by prospective purchasers in connection with their
due diligence review of the FBO Business. Notwithstanding any provision hereof to the contrary, no
confidential or non-public information relating to Landmark or the FBO Business will be provided to
any prospective purchaser of the FBO Business prior to the Closing Date, other than (subject to
such prospective purchaser executing a customary confidentiality agreement of which Landmark is a
beneficiary) such confidential information as is included in a confidential offering memorandum
that contains information customarily included in confidential offering memorandum used to sell
private businesses and the contents of which are approved in writing by Landmark and the Holder
Representative. Nothing in this Section 7.4(b) shall require Landmark or any of its Subsidiaries
to provide any assistance to the extent it would interfere unreasonably with the ongoing business
or operation of Landmark or its Subsidiaries or the transactions contemplated by this Agreement
(including, the financing thereof). Notwithstanding anything in this Section 7.4 to the contrary,
neither the Companies nor any of their respective Subsidiaries shall be required to incur any
out-of-pocket expenses or other liability with respect to the FBO Business Sale Transaction prior
to the Closing. Acquiror shall reimburse Landmark for any documented out-of-pocket fees and
expenses paid by Landmark or its Subsidiaries (other than to its Affiliates) in connection with
their cooperation pursuant to this Section 7.4, which shall be paid by Acquiror prior to the close
of business on the Business Day immediately prior to the Closing Date following delivery by
Landmark of an estimate and final calculation thereof (x) in accordance with Section 2.10 or (y)
promptly following the termination of this Agreement. Acquiror shall indemnify and hold harmless
the Companies and each of their respective officers, directors, employees and representatives for
any liabilities, losses or other damages of any kind suffered or incurred by them in connection
with the FBO Business Sale Transaction.
7.5 Letter of Credit
Concurrently with the execution and delivery of this Agreement, Acquiror has delivered a
standby letter of credit, dated as of April 2, 2007, in the amount of One Hundred Million Dollars
($100,000,000) in favor of the Holder Representative (such letter of credit and any letter of
credit substituted therefore, the “Letter of Credit”). Acquiror shall maintain the Letter
of Credit, or cause the expiration date of the Letter of Credit to be extended or the Letter of
Credit to be replaced with a substitute letter of credit in an undrawn face amount equal to the
face amount of the Letter of Credit, as the case may be, until the earliest to occur of: (i) the
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Effective Times of the Mergers, (ii) termination of this Agreement pursuant to and in
accordance with Section 10.1 (other than Section 10.1(b)(i) or Section 10.1(c)(i)), (iii) if the
this Agreement is terminated pursuant to and in accordance with Section 10.1(b)(i) or Section
10.1(c)(i), sixty (60) days following such termination, provided that if the Companies make any
claim against Acquiror relating to this Agreement prior to the expiration of such sixty (60) day
period, then Acquiror shall cause the expiration date of the Letter of Credit to be extended or the
Letter of Credit to be replaced with a substitute letter of credit in a face amount equal to the
face amount of the Letter of Credit, as the case may be, until (x) final resolution of such claim
as set forth in a final and nonappealable judgment or award of an arbitrator, arbitration panel or
court of competent jurisdiction, as applicable, (y) as agreed in any settlement agreement, duly
executed by Acquiror and the Companies, or (z) written agreement of the Acquiror and the Holder
Representative that the Letter of Credit is not required to be maintained (any such event set forth
in clauses (i), (ii) or (iii), above, a “Letter of Credit Termination Event”). Immediately
following the occurrence of a Letter of Credit Termination Event, the Holder Representative shall
return the Letter of Credit, together with any documents requested by the issuing bank in
connection with the cancellation of the Letter of Credit, to Acquiror. The Holder Representative
shall be entitled to draw on the Letter of Credit (A) in an amount equal to (1) the amount of any
damages awarded to any of the Companies or their respective stockholders against Acquiror or Merger
Subs pursuant to a claim related to this Agreement or the transactions contemplated hereby in a
final and nonappealable judgment or award of an arbitrator, arbitration panel or court of competent
jurisdiction, as applicable, or (2) the amount agreed in any settlement agreement related to this
Agreement or the transactions contemplated hereby, duly executed by Acquiror and the Holder
Representative, in each case, to the extent not paid by Acquiror within 10 Business Days of
Acquiror’s receipt of a written demand therefor, upon delivery of a draw certificate in the form
attached as Exhibit A to the Letter of Credit (the “Draw Certificate”) duly
executed by the Holder Representative attaching a copy of such judgment, award or settlement
agreement, as the case may be, or (B) upon the delivery of the Draw Certificate, the full face
amount of the Letter of Credit in the event that Acquiror has failed to extend the then current
maturity date of the Letter of Credit or replace the Letter of Credit with a substitute letter of
credit at least fifteen (15) days prior to the expiration of the Letter of Credit;
provided, however, that in the event the Holder Representative shall have drawn on
the Letter of Credit pursuant to this clause (B), the Holder Representative shall concurrent with
the drawing of such amount, deposit cash in an amount equal to such amount into escrow with
Citibank, N.A., pursuant to the terms of an escrow agreement substantially in the form of the
Escrow Agreement providing for the release of such escrowed funds upon (i) a final and
nonappealable judgment or award of an arbitrator, arbitration panel or court of competent
jurisdiction, as applicable, or (ii) a written settlement agreement, duly executed by the Holder
Representative and Acquiror All fees and expenses related to obtaining and maintaining the Letter
of Credit or any substitute letter of credit pursuant to this Section 7.5 shall be borne by
Acquiror.
ARTICLE VIII.
CLOSING
CLOSING
8.1 Filing of Certificate of Merger. Assuming all of the conditions set forth in Article IX of this Agreement have either been
fulfilled or waived, and if this Agreement has not theretofore been terminated pursuant to its
terms, the Boards of Directors of Acquiror, Merger Subs and the Companies shall direct their
officers forthwith to file and record all relevant
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documents, including, without limitation, the applicable Certificate of Merger, with the
appropriate government officials to effectuate the Mergers on the Closing Date.
8.2 Closing. The Closing shall take place at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Xxxx
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 a.m. on the date which is three (3) Business Days after
the date on which all conditions set forth in Section 9.1 shall have been satisfied or waived
(other than those conditions that by their terms are to be satisfied at the Closing) or such other
time and place as Acquiror and the Companies may mutually agree (the “Closing Date”). The
term “Closing,” when used in this Agreement, means the Effective Time of the Mergers.
ARTICLE IX.
CONDITIONS TO OBLIGATIONS
CONDITIONS TO OBLIGATIONS
9.1 Conditions to Obligations of Acquiror, Merger Subs and the Companies. The obligations of Acquiror, Merger Subs and the Companies to consummate, or cause to be
consummated, the Mergers are subject to the satisfaction of the following conditions, any one or
more of which may be waived in writing by such parties:
(a) All waiting periods under the HSR Act and the Competition Act applicable to the Mergers
shall have expired or been waived or terminated.
(b) Any review or investigation of the Mergers under the Exon-Xxxxxx Amendment shall have
terminated, without any action to suspend or prohibit the transactions contemplated hereby by the
President of the United States, or CFIUS shall have issued the CFIUS Approval.
(c) All other permits, approvals, clearances, filings and consents of Governmental Authorities
required to be procured by Acquiror, Merger Subs and the Companies in connection with the Merger
and the transactions contemplated by this Agreement the failure of which to obtain would have, or
would reasonably be expected to have, a Material Adverse Effect on the Combined Companies, shall
have been procured without the imposition of any terms, conditions or limitations that would have,
or would reasonably be expected to have, a Material Adverse Effect on the Combined Companies;
provided, however, that (i) any novations or consents required in connection with
any Contracts with any Governmental Authority or any subcontracts under any such contracts with any
Governmental Authority and (ii) any consent or approval in connection with the transfer or
disposition of Landmark’s Part 135 certificates and aircraft registrations need not be obtained
prior to Closing.
(d) There shall not be in force any Governmental Order, statute, rule or regulation issued by
the United Stated or Canadian federal governments restraining, enjoining or prohibiting the
consummation of the Mergers.
9.2 Conditions to Obligations of Acquiror and Merger Subs. The obligations of Acquiror and Merger Subs to consummate, or cause to be consummated, the
transactions contemplated by this Agreement are subject to the satisfaction of the following
additional conditions, any one or more of which may be waived in writing by Acquiror and Merger
Subs:
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(a) The representations and warranties of the Companies contained in this Agreement shall
be true and correct as of the date of this Agreement and shall be true and correct as of the
Closing Date (or in the case any such representations and warranties expressly relate to an earlier
date, at and as of such earlier date), except in each case, as has not had or would not reasonably
be expect to have, individually or in the aggregate, a Material Adverse Effect; provided,
however, that for purposes of the foregoing, all such representations and warranties that
are qualified by “materiality” or “Material Adverse Effect” qualifications shall be read as if they
were not so qualified, but, for the avoidance of doubt, specific numeric thresholds shall not be so
disregarded.
(b) Each of the covenants and agreements of each Company to be performed as of or prior to the
Closing shall have been performed in all material respects.
(c) There shall not have been any change, event, occurrence or development that, individually
or in the aggregate, has had or would reasonably be expected to have, a Material Adverse Effect on
the Combined Companies.
(d) Each Company shall have delivered to Acquiror a certificate signed by an officer of such
Company, dated the Closing Date, certifying that, to the knowledge and belief of such officer, the
conditions specified in Section 9.2(a) and Section 9.2(b) have been fulfilled.
(e) As of the Closing Date, (i) no more than 0.5% of the aggregate number of shares of
Landmark Common Stock that are issued and outstanding as of the Closing Date shall be Dissenting
Landmark Common Shares and (ii) no more than 0.5% of the aggregate number of shares of Standard
Common Stock that are issued and outstanding as of the Closing Date shall be Dissenting Standard
Common Shares; provided, however, in the event that such condition is not satisfied
as of the Closing Date, such condition shall be deemed satisfied in the event that Carlyle Standard
and/or Carlyle Landmark enters into a written agreement to provide full indemnification with
respect to any amounts payable to the holders of such Dissenting Landmark Common Shares and
Dissenting Standard Common Shares in excess to that portion of the Merger Consideration to which
such holders would otherwise be entitled and any documented out-of-pocket costs incurred by the
Standard Surviving Corporation or the Landmark Surviving Corporation in connection with any
appraisal proceedings in connection therewith, on terms and conditions reasonably satisfactory to
Acquiror.
9.3 Conditions to the Obligations of the Companies. The obligation of the Companies to
consummate the transactions contemplated by this Agreement is subject to the satisfaction of the
following additional conditions, any one or more of which may be waived in writing by the
Companies:
(a) The representations and warranties of Acquiror contained in this Agreement shall be true
and correct as of the date of this Agreement and shall be true and correct as of the Closing Date,
(or in the case any such representations and warranties expressly relate to an earlier date, at and
as of such earlier date), except in each case, as has not had or would not
reasonably be expect to have, individually or in the aggregate, a material adverse effect on
Acquiror’s or any of Merger Subs’ ability to consummate the Mergers or the other transactions
contemplated hereby (including the financing thereof); provided, however, that for purposes of
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this
subsection (a), all such representations and warranties that are qualified by “materiality” or
“Material Adverse Effect” qualifications shall be read as if they were not so qualified.
(b) Each of the covenants and agreements of Acquiror to be performed as of or prior to the
Closing shall have been performed in all material respects.
(c) Acquiror shall have delivered to the Companies a certificate signed by an officer of
Acquiror, dated the Closing Date, certifying that, to the knowledge and belief of such officer, the
conditions specified in Section 9.3(a) and Section 9.3(b) have been fulfilled.
ARTICLE X.
TERMINATION/EFFECTIVENESS
TERMINATION/EFFECTIVENESS
10.1 Termination. This Agreement may be terminated and the transactions contemplated hereby
abandoned:
(a) By mutual written consent of the parties authorized, at any time prior to the Closing.
(b) Prior to the Closing, by written notice to the Companies from Acquiror, if (i) there is
any material breach of any representation, warranty, covenant or agreement on the part of a Company
set forth in this Agreement, or if a representation or warranty of a Company shall be untrue in any
material respect, in either case, such that the conditions specified in Section 9.2(a) or Section
9.2(b) hereof would not be satisfied at the Closing (a “Terminating Company Breach”),
except that, if such Terminating Company Breach is curable by such party through the exercise of
its commercially reasonable efforts, then, for a period of up to thirty (30) days, but only as long
as such party continues to use its commercially reasonable efforts to cure such Terminating Company
Breach (the “Company Cure Period”), such termination shall not be effective, and such
termination shall become effective only if the Terminating Company Breach is not cured within the
Company Cure Period; (ii) the Closing has not occurred on or before the Termination Date other than
as a result of a breach of a representation, warranty, covenant or agreement of Acquiror or a
Merger Sub; (iii) any governmental or regulatory consent or approval required for consummation of
the transactions contemplated hereby is denied by or in a final order or other final action issued
or taken by the appropriate Governmental Authority; (iv) consummation of any of the transactions
contemplated hereby is enjoined, prohibited or otherwise restrained by the terms of a final,
non-appealable order or judgment of a court of competent jurisdiction; (v) the issuance by the
President of the United States of a notification that the United States Government will take action
to suspend or prohibit the consummation of the transactions contemplated by this Agreement; or (vi)
enactment of legislation by the United States federal government preventing the consummation of the
transactions contemplated by this Agreement.
(c) Prior to the Closing, by written notice to Acquiror from the Companies, if (i) there is
any material breach of any representation, warranty, covenant or agreement on the
part of Acquiror or a Merger Sub set forth in this Agreement, or if a representation or
warranty of Acquiror or a Merger Sub shall be untrue in any material respect, in either case, such
that the conditions specified in Section 9.3(a) or Section 9.3(b) hereof would not be satisfied at
the
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Closing (a “Terminating Acquiror Breach”), except that, if such Terminating Acquiror
Breach is curable by Acquiror through the exercise of its commercially reasonable efforts, then,
for a period of up to thirty (30) days, but only as long as Acquiror continues to exercise such
commercially reasonable efforts to cure such Terminating Acquiror Breach (the “Acquiror Cure
Period”), such termination shall not be effective, and such termination shall become effective
only if the Terminating Acquiror Breach is not cured within the Acquiror Cure Period, (ii) the
Closing has not occurred on or before the Termination Date other than as a result of a breach of a
representation, warranty, covenant or agreement of the Companies, (iii) any governmental or
regulatory consent or approval required for consummation of the transactions contemplated hereby is
denied by or in a final order or other final action issued or taken by the appropriate Governmental
Authority (iv) consummation of any of the transactions contemplated hereby is enjoined, prohibited
or otherwise restrained by the terms of a final, non-appealable order or judgment of a court of
competent jurisdiction; (v) the issuance by the President of the United States or CFIUS of a
notification that the United States Government will take action to suspend or prohibit the
consummation of the transactions contemplated by this Agreement; or (vii) enactment of U.S. Federal
legislation prohibiting the consummation of the transactions contemplated by this Agreement. The
prior approval of this Agreement by the stockholders of each Company pursuant to the Landmark
Stockholder Written Consent and the Standard Stockholder Written Consent shall not restrict the
ability of such Company’s Board of Directors to terminate this Agreement in accordance with this
Section 10 hereof or to cause such Company to enter into an amendment to this Agreement pursuant to
Section 12.12 hereof to the extent permitted under Section 251(d) of the DGCL.
10.2 Effect of Termination. In the event of termination and abandonment of this Agreement
pursuant to Section 10.1, this Agreement shall forthwith become void and have no effect, without
any liability on the part of any party hereto or its respective Affiliates, officers, directors or
stockholders, other than liability of the Companies, Acquiror or Merger Subs, as the case may be,
for any intentional and willful breach of this Agreement occurring prior to such termination, and
the parties hereto acknowledge that it is the intention of the parties hereto that no party shall
have any remedy or right to recover for any losses or damages resulting from any breach of the
provisions hereof unless such breach was intentional and willful on the part of the breaching
party; provided, however, the parties agree that in the event that all of the
conditions to closing set forth in Sections 9.1 and 9.2 have been satisfied and Acquiror or Merger
Subs fail to consummate the transactions contemplated hereby on the Closing Date, such failure
shall be deemed an intentional and willful breach of this Agreement and provided,
further, the parties agree that in the event that all of the conditions to closing set
forth in Sections 9.1 and 9.3 have been satisfied and the Companies fail to consummate the
transactions contemplated hereby on the Closing Date, such failure shall be deemed an intentional
and willful breach of this Agreement. The provisions of Sections 7.1, 10.2, 11.1, 11.6 and 11.7
hereof shall survive any termination of this Agreement.
ARTICLE XI.
HOLDER REPRESENTATIVE
HOLDER REPRESENTATIVE
11.1 Designation and Replacement of Holder Representative. The parties have agreed that it is
desirable to designate a representative to act on behalf of holders of the Landmark Common Shares,
the Standard Common Shares, the Landmark Vested Options and
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the Standard Vested Options for certain
limited purposes, as specified herein (the “Holder Representative”). The parties have
designated the Holder Representative as the initial Holder Representative, and approval of this
Agreement by the holders of Common Shares and Vested Options shall constitute ratification and
approval of such designation. The Holder Representative may resign at any time, and the Holder
Representative may be removed by the vote of Persons that collectively owned more than fifty
percent (50%) of the Aggregate Fully-Diluted Landmark Common Shares immediately prior to the
Effective Time of the Mergers (“Majority Holders”). In the event that a Holder
Representative has resigned or been removed, a new Holder Representative shall be appointed by a
vote of Majority Holders, such appointment to become effective upon the written acceptance thereof
by the new Holder Representative.
11.2 Authority and Rights of the Holder Representative; Limitations on Liability. The Holder
Representative shall have such powers and authority as are necessary to carry out the functions
assigned to it under this Agreement; provided, however, that the Holder
Representative shall have no obligation to act on behalf of the holders of Common Shares and Vested
Options, except as expressly provided herein. The Holder Representative shall have no liability to
Acquiror, the Companies or the holders of Landmark Common Shares, Standard Common Shares, Landmark
Vested Options and Standard Vested Options with respect to actions taken or omitted to be taken in
its capacity as the Holder Representative, except with respect to the Holder Representative’s gross
negligence or willful misconduct. The Holder Representative shall at all times be entitled to rely
on any directions received from the Majority Holders; provided, however, that the
Holder Representative shall not be required to follow any such direction, and shall be under no
obligation to take any action in its capacity as the Holder Representative, unless the Holder
Representative is holding funds delivered to it under Section 2.5 of this Agreement and/or has been
provided with other funds, security or indemnities which, in the sole determination of the Holder
Representative, are sufficient to protect the Holder Representative against the costs, expenses and
liabilities which may be incurred by the Holder Representative in responding to such direction or
taking such action. The Holder Representative shall be entitled to engage such counsel, experts
and other agents and consultants as it shall deem necessary in connection with exercising its
powers and performing its function hereunder and (in the absence of bad faith on the part of the
Holder Representative) shall be entitled to conclusively rely on the opinions and advice of such
Persons. The Holder Representative shall be entitled to reimbursement, from funds paid to it under
Section 2.5 of this Agreement and/or otherwise received by it in its capacity as the Holder
Representative pursuant to or in connection with this Agreement, for all reasonable expenses,
disbursements and advances (including fees and disbursements of its counsel, experts and other
agents and consultants) incurred by the Holder Representative in such capacity, and for
indemnification against any loss, liability or expenses arising out of actions taken or omitted to
be taken in its capacity as the Holder
Representative (except for those arising out of the Holder Representative’s gross negligence or
willful misconduct), including the costs and expenses of investigation and defense of claims. In
the event that the funds paid to the Holder Representative pursuant to Section 2.5 exceed the
Holder Allocable Expenses, the Holder Representative shall be entitled to retain such excess amount
as a fee for its services as Holder Representative hereunder.
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ARTICLE XII.
MISCELLANEOUS
MISCELLANEOUS
12.1 Nonsurvival of Representations and Warranties. The representations, warranties, covenants
and obligations of the Parties contained in this Agreement and in any certificate or instrument
delivered at the Closing shall not survive beyond the Effective Times of the Mergers or termination
of this Agreement except (i) as provided in Section 10.2, and (ii) for the covenants and
obligations set forth in Sections 6.2 and 6.3.
12.2 Waiver. Any party to this Agreement may, at any time prior to the Closing, by action taken
by its Board of Directors, or officers thereunto duly authorized, waive any of the terms or
conditions of this Agreement by delivering a writing executed by one its authorized executive
officers to each party hereto specifically describing the term or condition waived hereunder.
12.3 Notices. All notices and other communications among the parties shall be in writing and
shall be deemed to have been duly given when (i) delivered in person, (ii) five days after posting
in the United States mail having been sent registered or certified mail return receipt requested,
(iii) delivered by FedEx or other nationally recognized overnight delivery service, or (iv)
delivered by telecopy and promptly confirmed by delivery in person or post as aforesaid in each
case, with postage prepaid, addressed as follows:
(a) If to Acquiror or Merger Subs, to:
Dubai Aerospace Enterprise (DAE) Ltd
X.X. Xxx 0000
Xxxxx, Xxxxxx Xxxx Xxxxxxxx
Telephone: + 000-0-000-0000
Telecopy: + 971-4-329-2430
Attention: General Counsel
X.X. Xxx 0000
Xxxxx, Xxxxxx Xxxx Xxxxxxxx
Telephone: + 000-0-000-0000
Telecopy: + 971-4-329-2430
Attention: General Counsel
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxx
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxx
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(b) If to Landmark, to:
Piedmont/Hawthorne Holdings, Inc.
0000 X. 00xx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxx, General Counsel
0000 X. 00xx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxx, General Counsel
with copies to:
TC Group, L.L.C.
c/o The Carlyle Group
0000 Xxxxxxxxxxxx Xxx. X.X.
Xxxxx 000 Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
c/o The Carlyle Group
0000 Xxxxxxxxxxxx Xxx. X.X.
Xxxxx 000 Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
and:
Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxx, Xx.
Telecopy No.: (000) 000-0000
000 Xxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxx, Xx.
Telecopy No.: (000) 000-0000
(c) If to Standard Aero, to:
Standard Aero Acquisition Holdings, Inc.
000-0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx XX X0X 0X0
Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxxxxx, Chief Financial Officer
000-0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx XX X0X 0X0
Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxxxxx, Chief Financial Officer
with copies to:
TC Group, L.L.C.
c/o The Carlyle Group
0000 Xxxxxxxxxxxx Xxx. X.X.
Xxxxx 000 Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
c/o The Carlyle Group
0000 Xxxxxxxxxxxx Xxx. X.X.
Xxxxx 000 Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
77
and:
Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxx, Xx.
Telecopy No.: (000) 000-0000
000 Xxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxx, Xx.
Telecopy No.: (000) 000-0000
or to such other address or addresses as the parties may from time to time designate in writing.
12.4 Assignment. No party hereto shall assign this Agreement or any part hereof without the
prior written consent of the other parties, except that Acquiror or either Merger Sub, as
applicable, may assign, in whole or in part, its rights and obligations under this Agreement to any
Affiliate of Acquiror, or to a lender of Acquiror or either Merger Sub as collateral for
indebtedness, without the prior written consent of the other parties, provided that
Acquiror or the applicable Merger Sub shall remain liable for all of its obligations under this
Agreement. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective permitted successors and assigns.
12.5 Rights of Third Parties. Nothing expressed or implied in this Agreement is intended or
shall be construed to confer upon or give any Person, other than the parties hereto, any right or
remedies under or by reason of this Agreement; provided, however, that,
notwithstanding the forgoing, in the event the Closing occurs, the officers and directors of each
Company shall be intended third-party beneficiaries of, and shall be entitled to the protections
of, Section 6.2 hereof. No party to this Agreement may assert any claim against any officer,
director, shareholder, partner or member of
any party to this Agreement under this Agreement or in connection with the transactions
contemplated hereby unless such Person is also a party to this Agreement.
12.6 Expenses. Except as set forth in Sections 2.5 and 6.1(d), each party hereto shall bear its
own expenses incurred in connection with this Agreement and the transactions herein contemplated
whether or not such transactions shall be consummated, including, without limitation, all fees of
its legal counsel, financial advisers and accountants; provided, however, that
Acquiror shall pay all stamp tax or other transfer tax payable as a result of the Merger or the
consummation of the transactions contemplated hereby. In the event the transactions contemplated
hereby are not consummated, each party hereto shall pay its own costs and expenses including,
without limitation, all fees of its legal counsel, financial advisors and accountants; provided,
however, that, in the event that the transactions contemplated hereby are not consummated, Acquiror
shall pay all fees and expenses in connection with any financing arrangements, and any such
out-of-pocket fees and expenses in connection with such financing arrangements incurred by the
Companies prior to the date of termination shall be reimbursed by Acquiror promptly upon written
demand therefor.
12.7 Governing Law. This Agreement shall be construed and enforced in accordance with the laws
of the State of New York, without regard to principles of choice or conflicts of law thereof.
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12.8 Captions; Counterparts. The captions in this Agreement are for convenience only and shall
not be considered a part of or affect the construction or interpretation of any provision of this
Agreement. This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.
12.9 Schedules and Annexes. The Schedules and Annexes are a part of this Agreement as if fully
set forth herein. All references herein to articles, sections, paragraphs, Schedules and Annexes
shall be deemed references to such parts of this Agreement, unless the context shall otherwise
require. Any disclosure made by a party in the Schedules with respect to any section or schedule
of this Agreement shall be deemed to be a disclosure with respect to all other sections or
schedules to which it is reasonably apparent that such disclosure would relate. Certain
information set forth in the Schedules is included solely for informational purposes and may not be
required to be disclosed pursuant to this Agreement. The disclosure of any information shall not
be deemed to constitute an acknowledgment that such information is required to be disclosed in
connection with the representations and warranties made in this Agreement, nor shall such
information be deemed to establish a standard of materiality. Prior to the Closing, each of
Standard Aero and Landmark shall supplement, modify or update the Schedules, as applicable (each
such update, a “Schedule Update”) as promptly as reasonably practicable after becoming
aware of the occurrence, impending occurrence or nonoccurrence of any event or circumstance
relating to such party that would cause any Schedule to be inaccurate, incomplete or materially
misleading
in any respect at any time from the date hereof to the Closing; provided, however,
that no Schedule Update shall (i) be deemed to cure any breach of any representation or warranty
made in this Agreement or (ii) be given effect for purpose of satisfying the conditions to the
obligations of Acquiror and Merger Subs contained in Section 9.2.
12.10 Construction.
(a) Unless the context of this Agreement otherwise requires, (i) words of any gender include
each other gender; (ii) words using the singular or plural number also include the plural or
singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby” and derivative or
similar words refer to this entire Agreement; (iv) the terms “Article” or “Section” refer to the
specified Article or Section of this Agreement; (v) the word “including” shall mean “including,
without limitation” and (vi) the word “or” shall be disjunctive but not exclusive.
(b) References to agreements and other documents shall be deemed to include all subsequent
amendments and other modifications thereto.
(c) References to statutes shall include all regulations promulgated thereunder and references
to statutes or regulations shall be construed as including all statutory and regulatory provisions
consolidating, amending or replacing the statute or regulation.
(d) The language used in this Agreement shall be deemed to be the language chosen by the
parties to express their mutual intent and no rule of strict construction shall be applied against
any party.
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(e) Whenever this Agreement refers to a number of days, such number shall refer to calendar
days unless Business Days are specified.
(f) All accounting terms used herein and not expressly defined herein shall have the meanings
given to them under GAAP.
(g) All references to dollars or other currencies contained in this Agreement are U.S.
Dollars.
12.11 Entire Agreement. This Agreement (together with the Schedules and Annexes to this
Agreement), that certain Confidentiality Agreement dated as of January 18, 2007 between Acquiror
and Carlyle Investment Management, L.L.C. (the “Confidentiality Agreement”) and any written
agreements executed substantially concurrent with the execution of this Agreement constitute the
entire agreement among the parties and supersede any other agreements, whether written or oral,
that may have been made or entered into by or among any of the parties hereto or any of their
respective Subsidiaries relating to the transactions contemplated hereby. No representations,
warranties, covenants, understandings, agreements, oral or otherwise, relating to the transactions
contemplated by this Agreement exist between the parties except as expressly set forth in this
Agreement and the Confidentiality Agreement.
12.12 Amendments. This Agreement may be amended or modified in whole or in part, only by a duly
authorized agreement in writing executed in the same manner as this Agreement and which makes
reference to this Agreement.
12.13 Publicity. All press releases or other public communications of any nature whatsoever
relating to the transactions contemplated by this Agreement, and the method of the release for
publication thereof, shall be subject to the prior mutual approval of Acquiror and the Companies
which approval shall not be unreasonably withheld by any party, except that no approval shall be
required for any press release or public announcement that is required by law. Without limiting
the foregoing, neither the Companies nor Acquiror shall, nor shall they permit any of their
representatives to, make any public statement or any voluntary statement to any regulatory agency,
to the U.S. Congress or to any other Person relating to the CFIUS Approval without the prior
consent of the other party hereto; provided, however that Acquiror and the
Companies agree to cooperate in good faith in respect of any such communications in order to ensure
that such Persons have all information reasonably required by them in order to evaluate the
transactions contemplated hereby.
12.14 Severability. If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement shall remain in full force
and effect. The parties further agree that if any provision contained herein is, to any extent,
held invalid or unenforceable in any respect under the laws governing this Agreement, they shall
take any actions necessary to render the remaining provisions of this Agreement valid and
enforceable to the fullest extent permitted by law and, to the extent necessary, shall amend or
otherwise modify this Agreement to replace any provision contained herein that is held invalid or
unenforceable with a valid and enforceable provision giving effect to the intent of the parties.
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12.15 Jurisdiction. Any proceeding or action arising out of or relating to this Agreement or the
transactions contemplated hereby may be brought in the courts of the Borough of Manhattan in the
State of New York, or, if it has or can acquire jurisdiction, in the United States District Court
for the Southern District of New York located therein, and each of the parties irrevocably submits
to the exclusive jurisdiction of each such court in any such proceeding or action, waives any
objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims
in respect of the proceeding or action shall be heard and determined only in any such court, and
agrees not to bring any proceeding or action arising out of or relating to this Agreement or the
transactions contemplated hereby in any other court.
12.16 Enforcement. The parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to specifically enforce the terms and
provisions of this Agreement, in addition to any other remedy to which any party is entitled at law
or in equity.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF the parties have hereunto caused this Agreement to be duly executed as of
the date first above written.
DUBAI AEROSPACE ENTERPRISE (DAE) LTD |
||||
By: | ||||
Name: | ||||
Title: | ||||
LMA MERGER SUB, INC. |
||||
By: | ||||
Name: | ||||
Title: | ||||
SAH MERGER SUB, INC. |
||||
By: | ||||
Name: | ||||
Title: | ||||
PIEDMONT/HAWTHORNE HOLDINGS, INC. |
||||
By: | ||||
Name: | ||||
Title: | ||||
STANDARD AERO ACQUISITION HOLDINGS, INC. |
||||
By: | ||||
Name: | ||||
Title: | ||||
TC GROUP, L.L.C. |
||||
By: | TCG Holdings, L.L.C. | |||
By: | ||||
Name: | ||||
Title: | ||||